Bitcoin briefly slid close to the $92,000 mark in early trading in Asia, a knee-jerk reaction to tariff threats from President Trump. The proposed measures target eight European countries: Denmark, Norway, Sweden, France, Germany, the Netherlands, Finland and Great Britain.
The initial level is set at 10% import tariffs for February 1, with a possible increase to 25% by June if talks fail. Furthermore, the President stated:
“This tariff will be due and payable until an agreement is reached for the complete and total purchase of Greenland.”
With US money markets closed for the holidays, the first shock was taken care of elsewhere. S&P 500 futures fell about 0.7%, while Nasdaq futures fell 1.0% in early Asian hours.
Japan’s Nikkei fell about 1%, while the MSCI Asia-Pacific index outside Japan fell 0.1%. European markets also looked bleak, with futures on the Euro Stoxx 50 and DAX both down around 1.1%.
The dollar fell against other safe-haven currencies, falling around 0.3% against the yen and 0.2% against the Swiss franc, while the euro recovered after a dip.
Gold rose 1.5% to a record, silver was at an ATH, while US crude fell on growth concerns linked to a possible trade dispute.
Source: trading view
Bitcoin [BTC] managed to claw back some losses in the following hours, so bargain buys and stable sentiment kept the boat afloat.
All eyes on capital flows and global data
European investors own about $8 trillion in US bonds and stocks.
A recent Bloomberg report stated that Deutsche Bank’s warnings that any shift could hit markets harder than the rates themselves. They even went so far as to call it a “weaponization of capital.”
There is more to pay attention to. China reports growth figures this week, the Bank of Japan makes policy decisions and US economic data could influence the Fed’s next move.
Meanwhile, the leaders also go to Davos, where tensions and security problems (including the Greenland conflict) will likely dominate the discussions.
Big days ahead!
Final thoughts
- Bitcoin price not yet out of the hole – $8 trillion in European holdings could change at any time.
- Look at the conversations with China, the Fed and Davos; global data and tensions are moving markets rapidly.