From Europe to Iran, Trump's new tariff threats trigger a safe-haven rush in the crypto market

Trump announces a 25% tariff on any countries conducting trade with Iran, a measure that will take effect soon. This is the third round of tariff threats issued within the past week. From Greenland to European allies, and then to Iran trade partners, Trump is building a global tariff web, and market reactions have been very clear: Bitcoin has fallen below $88,000, XRP has erased its entire monthly gain, and safe-haven funds are accelerating flow into gold and silver.

The Upward Trajectory of Trump’s Tariff Threats

Trump’s tariff policies have shown a clear escalation over the past week. According to the latest reports, he has not only issued tariff threats against European countries but also threatened new tariffs on supporting nations regarding Greenland, and now targets countries engaged in trade with Iran.

Policy threat scope expands

These tariff measures share a common feature: they all involve U.S. geopolitical interests. The Greenland tariffs target countries supporting Denmark, European tariffs target NATO allies’ “non-cooperation,” and Iran tariffs target countries violating U.S. policies toward Iran. A 25% tariff rate is considered a heavy blow in global trade, capable of causing substantial damage to the exports of affected countries.

Markets have already begun pricing in risk

Market reactions to these policy threats have been swift and profound. According to the latest data, the three major U.S. stock indices experienced their largest single-day declines this year on January 21: the Nasdaq fell over 2.3%, the S&P 500 dropped more than 2%, and the Dow declined over 1.7%. This broad decline indicates that investor concerns over escalating trade wars have translated into tangible selling pressure.

Divergence in Crypto Market as a Safe-Haven

The performance of the crypto market is particularly noteworthy, as it clearly reflects the current shift in market sentiment.

Risk assets under pressure, safe-haven assets strengthen

The declines in Bitcoin and XRP are especially notable. XRP was trading at high levels of $2.35–$2.40 in early January, now down to $1.89, a drop of over 20%, nearly erasing gains since 2026. This reflects a reassessment of risk assets by the market.

Clear signals of capital flow

The net outflow data from spot Bitcoin ETFs further confirms this. On Monday, there was a net outflow of $395 million in the U.S., with Fidelity’s FBTC contributing $205 million of that. This marks a clear shift after four days of inflows exceeding $1.8 billion. This outflow is not just technical adjustment but an active risk-averse move by investors.

Geopolitical Tensions Amplify Market Uncertainty

Beyond tariff threats, underlying geopolitical factors are equally important.

Military dimension of Iran situation

According to the Wall Street Journal, Trump is still demanding his aides provide “decisive” military options against Iran, amid reports of the U.S. dispatching aircraft carriers and fighter jets to the Middle East. This suggests that tariff threats may be part of a larger geopolitical game, with rising risks of military conflict.

Market enters “risk re-pricing” phase

Analysts note that the current market is in a “risk re-pricing” stage. Against the backdrop of simultaneous corrections in stocks, bonds, and crypto assets, gold and silver remain among the few assets with defensive properties. This divergence indicates that investors are re-evaluating the risk-return profile of various assets.

Potential Chain Reactions in the Future

Risks of retaliatory tariffs

The EU has indicated it is considering tariffs on $1.08 trillion worth of U.S. goods, along with other possible retaliatory measures. If Trump’s tariff policies are fully implemented, the global trade system could face greater chaos, putting pressure on all risk assets.

Continued pressure on crypto markets

Analysts warn that sustained macroeconomic pressures could push Bitcoin into the $67,000–$74,000 range. While the accuracy of this prediction remains to be verified, it reflects concerns about further downside for risk assets. In the context of rising geopolitical uncertainty and escalating global trade frictions, cryptocurrencies, as high-risk assets, are unlikely to remain unaffected.

Summary

Trump’s escalating tariff threats from Europe to Iran mark a dual rise in trade war and geopolitical risks. Market reactions are already very clear: risk assets are under broad pressure, with significant declines in Bitcoin and XRP, while safe-haven assets like gold and silver hit new highs. This is not just short-term volatility but a reassessment of the macro environment by investors. The core challenge for the crypto market now is that, amid rising global trade uncertainties, it is difficult to maintain an independent upward logic. The key future factors to watch are whether these tariff measures are fully implemented and whether they trigger global retaliatory tariffs, which will directly influence the next direction of the crypto market.