In mid-January 2026,
President Trump announced plans to impose 10% tariffs on imports from eight European countries like Germany, the UK, Denmark, especially France 200% .escalating to 25% by June, unless a deal is reached for the U.S. to acquire Greenland. This stemmed from a dispute over Greenland's status. The EU responded with threats of retaliation (potentially targeting €93 billion in U.S. goods), raising fears of a transatlantic trade war.
Indirect Impact on Crypto
Cryptocurrencies like Bitcoin and Ethereum are not directly affected by tariffs (they aren't physical imports), but they react strongly to broader market sentiment. Trade tensions create:
Risk-off behavior — Investors flee volatile assets like crypto toward safer havens (e.g., gold surged to records during the peak uncertainty).
Increased uncertainty — This leads to liquidations, deleveraging, and sell-offs in high-risk assets.
Recent events showed this clearly:
Bitcoin dropped ~3–7% (from around $95,000–$97,000 to lows near $87,000–$92,000).
Ethereum and altcoins (e.g., Solana) fell even more sharply (up to 11–14% in some cases).
The crypto market saw $850–$875 million in liquidations within 24 hours at the height of the threat.
Total crypto market cap lost billions, with broader equity markets also sliding.
This mirrors past patterns, like the October 2025 tariff threats on China, which wiped out $19 billion in crypto positions.
Recent Developments
The situation eased quickly: Trump later backed off the tariffs after discussions (including with NATO), citing a "framework" deal on Greenland/Arctic issues. Bitcoin and other cryptos rebounded, climbing back toward $90,000+ as risk sentiment improved.
Potential Long-Term Effects
While short-term dips are common during tariff announcements, prolonged trade wars could indirectly benefit crypto in some views:
Higher inflation from tariffs might erode fiat currencies → boosting demand for Bitcoin as a hedge.
Supply chain disruptions (e.g., mining hardware from Europe) could affect costs.
However, the immediate reaction has been negative due to risk aversion.
