🤖As of January 19, 2026
Recent actions and comments from President Donald Trump have pushed global markets into a risk-off mood, and cryptocurrencies have not been spared. While Trump’s administration has generally taken a pro-crypto stance since returning to office in January 2025—most notably by creating a U.S. strategic Bitcoin reserve and easing pressure from regulators—the market’s short-term direction is being driven more by trade tensions and political uncertainty.
Over the past few weeks, these factors have increased volatility and put downward pressure on crypto prices, even as long-term policy signals remain supportive.
1. Renewed Tariff Threats on European Goods (January 18, 2026)
What happened:
Trump announced that the U.S. may impose 10% tariffs on goods from eight European countries starting February 1, with rates potentially rising to 25% by June if no trade deal is reached. This move fits his broader “America First” approach and comes alongside aggressive actions against geopolitical rivals, including asset seizures.
How crypto reacted:
The announcement immediately triggered a risk-off reaction across financial markets. Investors moved money into traditional safe havens like gold, which hit new record highs, and pulled back from riskier assets such as cryptocurrencies.
Bitcoin slipped around 1–2%, falling to roughly $90,000
Ethereum dropped to about $3,100
Altcoins like Solana and Dogecoin fell harder, with losses in the 5–10% range
This reaction follows a familiar pattern. Trump’s tariff rhetoric has repeatedly unsettled markets, and some analysts estimate that import taxes have contributed to tens of billions of dollars in monthly outflows from retail equities, indirectly cooling enthusiasm for crypto as well.
On social media, many traders expressed frustration, pointing out that crypto tends to suffer the most during geopolitical stress because it sits at the highest-risk end of the asset spectrum.
Bigger picture:
Tariffs also complicate the Federal Reserve’s ability to cut interest rates. Higher rates reduce liquidity and typically weigh on speculative assets like crypto. That said, some market participants believe the impact could be temporary, arguing that a stronger U.S. dollar and capital inflows into U.S. markets may eventually support liquidity again.
2. 25% Tariff on Advanced Computing Chips (Early January 2026)
What happened:
Earlier this month, the White House imposed a 25% tariff on certain imported advanced computing chips, while carving out exemptions for chips tied to U.S.-based AI infrastructure. The goal is to bring more technology and energy production back onshore.
How crypto reacted:
This move raised concerns about higher costs and supply-chain disruptions for industries that rely heavily on advanced hardware—especially crypto mining, blockchain infrastructure, and AI-related projects.
As a result:
Ethereum is down roughly 9% since early January
Several layer-1 altcoins were hit extremely hard, with tokens like Sui (SUI) down around 70%
Tech-linked and “AI narrative” tokens saw aggressive selling
Market rotation:
At the same time, investors have been rotating into commodities. Since Trump’s inauguration:
Silver is up about 177%
Gold is up roughly 68%
Bitcoin and Ethereum are down 8–10%
Many traders on X describe this as a clear rotation away from crypto, with some blaming Trump’s trade and industrial policies for cutting short what was expected to be a strong 2025 bull market.
Possible upside:
The AI exemptions could eventually benefit crypto projects tied to decentralised computing and data infrastructure. However, for now, short-term volatility has dominated, with Trump’s comments frequently triggering sharp market moves.
3. Financial Infrastructure Comments and Crypto Bill Delays (Mid-January 2026)
What happened:
Trump publicly criticised the launch of NYSE Texas, a rival exchange based in Dallas, calling it “unbelievably bad” for New York. Around the same time, the U.S. Senate delayed markup of the CLARITY Act, a major crypto market-structure bill. Following last-minute changes, Coinbase withdrew its support.
These events came despite earlier pro-crypto actions, including executive orders allowing retirement funds to hold digital assets and the creation of the Bitcoin reserve using seized assets.
How crypto reacted:
The delay of the CLARITY Act was widely seen as a major setback. Many in the industry believe it increases political risk and creates room for questionable behaviour, something reflected in the collapse of politically themed meme coins like $TRUMP , which is down nearly 80% since inauguration.
Prominent figures such as Cardano founder Charles Hoskinson openly criticised the administration, arguing that it has damaged the U.S. crypto environment rather than strengthening it.
Regulatory controversy:
Trump’s close ties with crypto donors and industry figures—such as high-profile pardons and paused investigations—have led to dropped cases against major firms like Coinbase and Kraken. Supporters see this as regulatory relief, while critics call it “pay-to-play” politics.
While these moves may improve long-term industry confidence, they have also created short-term uncertainty. Lawmakers like Elizabeth Warren have warned that weakened oversight could put retail investors and retirement savings at risk.
Market impact:
The total crypto market cap fell about 5% over the past week
Many altcoins are down 30–70% since the start of 2026
Online sentiment shows growing disappointment compared to the early optimism that Trump would make the U.S. the “crypto capital of the world”
Overall Market Trends and Outlook
Current prices (mid-January 2026):
Bitcoin: ~$90,000 (down ~10% since Jan 2025)
Ethereum: ~$3,100 (down ~9%)
Altcoins: Many down 40–80%
The Crypto Fear & Greed Index sits firmly in “Fear” (around 25), which historically can signal a potential rebound if macro pressures ease.
Bullish forces
Strategic Bitcoin reserve
Softer SEC enforcement
Continued institutional interest (including ETFs)
Bearish forces
Tariffs and trade uncertainty
Delayed legislation
Political risk and sharp narrative shifts
Right now, crypto is caught between long-term political support and short-term macro stress.
Trump’s pro-crypto policies provide a strong foundation, but tariffs, trade tensions, and legislative delays are dominating market behaviour. Until these uncertainties clear—either through trade deals or regulatory progress—volatility is likely to remain high.
The direction can still change quickly, especially if negotiations improve or Congress moves forward on crypto legislation.
#Trump's impact on crypto and trade
