Bitcoin erased all of its 2026 gains Wednesday, falling approximately 4% over 24 hours to around $88,850 in Asia morning trading, a level almost identical to where the cryptocurrency closed 2025, after President Donald Trump's push to acquire Greenland and threats of new tariffs on European allies rattled global markets.
What Happened: Three-Week Rally Wiped Out
The selloff came after Trump's geopolitical moves sent U.S. benchmark stock indexes down more than 2% on Jan. 21.
Trump said Saturday he would impose 10% tariffs starting February 1 on Denmark, Norway, Sweden, France, Germany, the United Kingdom, Netherlands and Finland until reaching a "complete and total purchase of Greenland."
The levies would increase to 25% by June 1 if no agreement materializes, marking a sharp escalation in tensions with NATO allies.
The VIX touched its highest level since November. The dollar weakened against most major currencies.
Bitcoin had briefly traded above $97,000 earlier in January following a Bureau of Labor Statistics inflation report showing prices stabilizing.
The cryptocurrency is now attempting to recover after hitting a session low of $87,901.
Shiyan Cao at hedge fund Winshore Capital told Bloomberg the situation "opened up a tail risk—that people don't want US assets," adding that investors must now price in a political risk premium.
Also Read: The One Signal Everyone Missed Before Bitcoin Crashed And Wiped Out Nearly $1B
Why It Matters: Volatility Ahead
The selloff echoed fears from April 2025, when Trump's sweeping tariff announcement triggered a deep slump in U.S. markets and a massive spike in volatility.
More turbulence looms Wednesday as the Supreme Court hears arguments over Trump's bid to fire Federal Reserve Governor Lisa Cook.
A deal may eventually defuse the Greenland tension, but it could take months. For now, Bitcoin appears to be stabilizing above $89,000 as traders assess whether this represents a buying opportunity or the start of a deeper correction.
For instance, Strategy continues aggressive Bitcoin accumulation with latest massive buy, pushing holdings above 3% of total supply.
Michael Saylor's company acquired 22,305 BTC for approximately $2.13 billion at an average price of $95,284 per coin.
As of January 20, Strategy's total holdings reached 709,715 Bitcoin valued near $53.92 billion, with an average acquisition cost of $75,979 per coin.
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