Bitcoin Plunges As Trump Tariffs Ignite Global Market Turmoil

Financial markets were thrown into turmoil this weekend after President Donald Trump announced sweeping new tariffs on several European nations, sparking a cascade of reactions from investors, policymakers, and global leaders. The move, which targets eight countries and is tied to a contentious dispute over Greenland, has already sent shockwaves through the cryptocurrency and commodities markets, and triggered emergency diplomatic efforts in Europe.

According to Bitcoin Magazine Pro, the drama began in earnest on January 17, 2026, when Trump revealed plans to slap a 10% tariff on goods from Denmark, Norway, Sweden, France, Germany, the United Kingdom, the Netherlands, and Finland starting February 1. If no agreement is reached, the tariff is set to jump to 25% by June 1. Trump linked the tariffs to the U.S. pursuit of acquiring Greenland, a proposal European leaders have flatly rejected.

The market response was swift and brutal. Around 6 p.m. EST on Saturday, the bitcoin price nosedived nearly $4,000 in just two hours, plummeting from about $95,500 to an intraday low of $91,935. The sudden drop triggered a wave of forced liquidations, wiping out more than $500 million in leveraged long positions within a single hour. The total crypto long liquidations topped $525 million, underscoring the volatility unleashed by the geopolitical shock, as reported by Bitcoin Magazine Pro.

Other cryptocurrencies were also caught in the storm. Bloomberg noted that by Monday morning, bitcoin had slid as much as 3.6% to below $92,000, while ether lost 4.9% and Solana tumbled 8.6%. The world’s largest cryptocurrency eventually stabilized near $92,600 but remained down about 2.5% over the previous 24 hours. The broader crypto market mirrored these losses, with global bitcoin market capitalization dropping approximately 2% to about $1.85 trillion, and 24-hour trading volume reaching $32 billion.

Traditional safe havens, meanwhile, saw renewed interest. Gold soared to a new all-time high of around $4,670, outpacing the battered crypto sector and reflecting investor anxiety over the escalating trade conflict. As InvestingLive put it, "gold is outperforming crypto," a sentiment echoed across financial news outlets as traders scrambled for safety.

The economic fallout didn’t stop at digital assets. U.S. stock markets opened lower on Monday following the tariff announcement, with risk sentiment broadly deteriorating. The U.S. dollar also weakened, and the euro slipped slightly as investors digested the implications of a potential transatlantic trade war.

Political leaders in Europe responded forcefully to Trump’s announcement. In a joint statement, the affected countries warned that the tariff threats risk a "dangerous downward spiral." Danish Prime Minister Mette Frederiksen was unequivocal, declaring, "Europe will not be blackmailed," and expressing gratitude for the solidarity shown by EU partners. Protests erupted in Denmark and Greenland over the weekend, adding to the political pressure on both sides of the Atlantic.

The European Union wasted no time in mounting its response. According to Reuters and InvestingLive, EU officials called an emergency summit of leaders for January 22 in Brussels to address the escalating dispute. The bloc began preparing to reinstate a previously suspended package of retaliatory tariffs targeting €93 billion worth of U.S. imports, which are set to automatically come back into force on February 6 if negotiations fail. The EU is also considering deploying its Anti-Coercion Instrument, a powerful tool that could limit U.S. access to the European public procurement market, investment opportunities, financial services, and segments of the digital economy.

European Council President Antonio Costa highlighted the bloc’s unity, stating that member states demonstrated "firm unity in support of Denmark and Greenland, alongside a shared readiness to resist what the bloc views as coercive trade tactics." Still, Costa and other EU officials stressed that Europe remains open to dialogue with Washington, hoping to avoid a full-blown trade war.

Amid the diplomatic scramble, attention is now turning to the World Economic Forum in Davos, where Trump is expected to appear later this week. European officials hope the high-profile gathering will offer an opportunity to de-escalate tensions, but warn that failure to reach an understanding could mean renewed market volatility and further strain on already fragile transatlantic relations.

Back in the U.S., the legal underpinnings of Trump’s tariff strategy are also facing a crucial test. The Supreme Court is set to rule on a closely watched case that could determine whether the president has the authority to impose sweeping tariffs under emergency powers. At issue is Trump’s use of the International Emergency Economic Powers Act (IEEPA) to declare trade deficits a national emergency and levy broad tariffs, including the baseline 10% duty on most imports. A ruling against Trump could force the government to refund more than $100 billion in tariffs already collected, potentially upending federal revenue assumptions tied to defense and budget plans. Importers, not wanting to be caught off guard, are keeping shipments “unliquidated” to preserve potential refund claims, according to Reuters and the Tax Foundation.

For crypto traders, the uncertainty has been particularly acute. With bitcoin’s circulating supply at 19.98 million BTC (out of a maximum 21 million), the asset’s scarcity has long been touted as a buffer against macroeconomic shocks. Yet, as the weekend’s events demonstrated, even digital gold isn’t immune to real-world politics. The sharp correction in bitcoin and other cryptocurrencies underscored how quickly sentiment can shift when global trade tensions flare.

As the week unfolds, all eyes remain on the emergency EU summit, the Supreme Court decision, and the upcoming World Economic Forum. Investors, policymakers, and ordinary citizens alike are anxiously awaiting signs of compromise—or escalation. Whether this trade standoff marks a temporary flare-up or the beginning of a deeper rift between the U.S. and Europe, the events of January 2026 have already left an indelible mark on financial markets and diplomatic relations.

For now, the world watches and waits, with portfolios on edge and leaders scrambling to prevent a dangerous downward spiral.