If you don’t like the price of Bitcoin, wait five minutes and it will change. The leading cryptocurrency’s volatility has been on full display at the start of the year, this time down around 7% since last week to its current price of just under $90,000 as of midday Tuesday.
Other cryptocurrencies also fell. Ethereum is down 11% over the past six days to its current price of around $3,000, and Solana is down around 14% over that time to its price of around $127.
The decline comes as President Donald Trump threatened European countries with tariffs as they opposed his plan to seize Greenland, sparking a run on the markets. Meanwhile, crypto markets faced additional headwinds as key legislation for the industry, known as the Clarity Act, remained stalled after industry giant Coinbase unexpectedly withdrew its support late last week.
“President Trump’s threat to impose tariffs on Europe has put Bitcoin under pressure,” said Russell Thompson, chief investment officer of the Hilbert Group. “The delay of the Clarity Act in the Senate committee, primarily due to Coinbase concerns, has eliminated much of the positive sentiment in the market.”
Coinbase CEO Brian Armstrong opposed the Clarity Act, primarily on the grounds that crypto owners would not be able to profit from stablecoins. The new uncertainty around the bill, which many believed was well on its way to a presidential signature, has shaken not only the price of crypto assets but also the stock prices of companies with exposure to digital assets.
It is unclear whether the current headwinds will abate anytime soon. Trump has made clear his intention to take control of Greenland. When a group of European countries expressed solidarity with the Danes, they threatened those countries with tariffs, saying they would not back down until Greenland was purchased. Bitcoin and other risk assets then fell, as did major stock indexes, while the price of gold rose.
It’s not all doom and gloom for crypto, at least according to some analysts, who view Bitcoin’s correlation with macroeconomic forces as confirmation that digital assets have finally gone mainstream.
“Bitcoin’s responsiveness is another sign of its increasing integration with broader macroeconomic forces, signaling maturation rather than fragility, even as short-term volatility continues,” said Beto Aparicio, senior director of strategic finance at Offchain Labs.
