Following the alarming headlines focusing on the fresh trade war between the U.S. and Europe, the crypto market observed a downtrend. Investors are selling off their holdings, and liquidations have piled up.
What is happening between the EU and US?
US president Donald J. Trump demanded the acquisition of Greenland from Denmark, which led the US and EU to a significant trade and diplomatic dispute.
As the US president threatened to raise tariffs on European goods due to the latter’s refusal to accept his terms, the EU has engaged in taking retaliatory measures. Europe announced on Sunday that they may hit the US with 93 billion euros ($107.71 billion) worth of tariffs or even restrict American companies from the European market.
The president continues with the threats of imposing a 10% tariff from February 1, 2026, on goods from Denmark, Norway, Sweden, France, Germany, the UK, the Netherlands, and Finland.
Impacts on crypto markets
The headlines impacted the market on Monday, leading to a sell-off across crypto markets, as new U.S. tariffs raised fears in global investments.
Data on CoinGecko shows Solana slid more than 6% over the past 24 hours, while XRP fell about 4% and DOGE dropped over 7%.
Ether took a bit of a tumble, dropping about 3% and staying close to the $3,200 mark, while Bitcoin held up a little better, yet slid below $93,000, losing around 2.5% over the day.
With the President’s threats continuing despite the sell-off, investors are pulling their investments out of risk-sensitive markets and redirecting their investments into safe haven assets like gold and silver.
Expert opinions
Lavneet Bansal, Analyst at 0x Three consulting firm says, “What we see now is crypto is reacting less to its own fundamentals and more to what’s happening across global markets. The trade tensions between the US and Europe, especially around tariffs being used as leverage over Greenland, have pushed investors into a clear risk-off mode. You can see that stress not just in crypto but also across equities in the US, Europe, and Asia.”
He also emphasized the long-term narrative of Bitcoin holding, saying, “Bitcoin, despite its long-term digital gold narrative, is still trading like a macro risk asset in moments like this. And when Bitcoin comes under pressure, altcoins tend to move together, which explains the broad, correlated sell-offs we’re seeing.
“I think as long as this kind of uncertainty hangs over global markets, volatility in Bitcoin and altcoins isn’t going away; it’s just going to come in waves,” he added.
Impact on safe haven assets
Times of uncertainties call for safer havens. Gold and silver, amid the crypto market impacts, have been hitting record highs while investors also piled into short-term government bonds. The price of gold hit $4,689.39 an ounce on Monday, while silver hit $94.08 an ounce.
Besides precious metals, the stock markets in Asia saw a dip. European markets also showed weakness.
Beyond crypto and stocks, the market showed a search for safety. The USD weakened against major currencies. Some investors also moved into short-term government bonds, pushing Germany’s two-year bond yield slightly lower.
