Bitcoin and global markets rebounded sharply after US President Donald Trump stated he would not proceed with tariffs related to Greenland. The statement alleviated concerns about a trade war that had previously worried investors.
Bitcoin rose again, approaching US$90,000, after briefly falling to an intraday level below US$89,000, while Ethereum also recovered towards US$3,000 after slipping below that level. US stocks also stabilized, with the S&P 500 reversing its losses. Gold, which had previously risen due to geopolitical risks, trimmed its gains.
Market reactions emerged after Trump announced that a framework agreement had been reached with NATO Secretary General Mark Rutte, thereby reducing the likelihood of trade actions against European allies in the near term.
Earlier in the trading session, the market sold off as Trump and senior US officials reiterated aggressive tariff rhetoric at the World Economic Forum in Davos.
Investors reacted to the renewed use of tariffs as a geopolitical tool, especially after Treasury Secretary Scott Bessent defended tariffs as an effective negotiation tool.
Bessent warned foreign governments not to retaliate, stating, "Calm down, take a deep breath. Don't retaliate," while emphasizing that tariffs remain at the core of US economic and security strategy.
The crypto market plummeted alongside stocks as investors accounted for higher inflation risks, tightening liquidity conditions, and renewed global trade uncertainties.
Bitcoin fell below US$90,000, while Ethereum weakened below US$3,000, showing the sensitivity of crypto assets to shocks from macroeconomic risks.
As the risks fade thanks to the latest update from the US President, the market begins to shift. Risky assets show signs of early recovery. Meanwhile, gold prices dropped immediately after the announcement.
This rapid recovery indicates that the crypto market is now highly tied to policy signals and macroeconomic factors, particularly related to inflation and trade.
Previous analyses indicated that the tariffs imposed throughout last year have largely been passed on to US consumers. This data strengthens concerns that the ongoing escalation of trade wars could delay interest rate cuts and tighten financial conditions.
This backdrop has weighed on digital assets since October, causing prices to move within a limited range and rallies to continuously fail to break through key resistance.
Once the threat of tariffs was directly removed, risk appetite returned, triggering short covering and purchases of crypto assets and stocks. The S&P 500 erased losses, while Bitcoin stabilized after a volatile session.
Although the market welcomes de-escalation, uncertainty remains. Trump stated that further discussions are ongoing regarding Greenland's strategic role in missile defense and Arctic security, so this issue is not fully resolved.
