Digital Gold Collapse Today - Bitcoin Sinks as Trump Threatens New Tariffs

The myth of Bitcoin as “digital gold” takes another devastating blow today as the crypto market crashes and the price of BTC falls to $84.87K, recording a loss of 5.09% in the last 24 hours. President Donald Trump’s geopolitical tensions and tariff threats are demonstrating how fragile the narrative is that Bitcoin would function as a safe-haven asset, revealing instead its true behavior as a highly risky, equity-correlated asset.

When Bitcoin Doesn’t Perform as a Safe Haven – The Failure of the Gold Myth

The idea that Bitcoin represents a digital equivalent of gold received yet another denial on Monday after Trump threatened to impose 10% tariffs on Denmark and seven other European countries, in connection with his plans regarding Greenland. As global stock markets lost ground and traditional gold reached new highs – a classic flight dynamic to safety – Bitcoin followed the opposite path, plunging along with tech stocks.

This behavior should come as a surprise to anyone who closely follows the digital gold narrative promoted by Bitcoin advocates. During times of geopolitical uncertainty, truly safe-haven assets maintain or even strengthen their value. Bitcoin, on the other hand, reacted like any other high-risk instrument, sensitive to investor sentiment and derisking movements.

Odds of reaching $100,000 plummet on Polymarket

The collapse in Bitcoin confidence is perfectly reflected in quotes on decentralized betting platform Polymarket, where “Yes” shares to reach $100,000 by the end of January plummeted from 72% on Jan. 15 to 50% on Friday, to just 27% after Trump’s comments. This drastic drop tells an eloquent story: the market quickly revised its expectations downwards in response to new trade tensions.

The domino effect has extended to the entire crypto industry, with CoinDesk indices recording uniform declines of more than 7% for memecoins, metaverse, computing, DeFi, and culture. A coordinated sale that highlights how cryptocurrencies still behave as a homogeneous category during times of stress, rather than as uncorrelated assets.

Whale movement contradicts price collapse

In apparent contradiction to today’s crash, on-chain data reveals interesting activity by so-called “whales” — addresses that hold between 1,000 and 10,000 BTC. According to analyst Samer Hasn of XS.com, these positions have increased by 28% in the last week, a sign that some sophisticated investors may be accumulating at current levels. Meanwhile, spot Bitcoin and Ethereum ETFs collectively attracted $1.4 billion and over $500 million respectively last week - the most robust flow since October - suggesting lingering institutional interest despite the volatility.

However, as Hasn himself notes, Bitcoin continues to struggle to hold on to the $92,000 mark, recording the fifth consecutive day of decline from its November highs. “The bear market is driven by a combination of profit-making and a ‘risk-off’ pivot as traders digest a sudden increase in U.S. political risk and geopolitical tensions,” the analyst said.

What will be the next level? The impact of tariffs on stability

The next movement will be mainly determined by the evolution of the tariff situation. According to Laser Digital, the price trend in the near term will directly depend on how US-EU trade tensions develop and persistent geopolitical risks in the Middle East, where tensions intensified over the weekend.

Items to watch in the coming week include the Davos forum, U.S. economic data on GDP and core personal spending, as well as a Supreme Court decision on the legality of Trump’s tariffs. Any positive developments on the trade front could provide the necessary support for a rebound, but at the moment, the odds look favorable.

Technically, about 63% of the wealth invested in Bitcoin has a base cost of more than $88,000, which means that most holders currently suffer paper losses. At the same time, there is a strong concentration of supply between $85,000 and $90,000, with relatively weak support below $80,000. This technical setup suggests further volatility in the coming days. The collapse of digital gold continues as long as geopolitical risks remain elevated.