Bitcoin's Narrative as 'Digital Gold' Shaken as Trump's Tariff Threat Pushes Price to $83K

The story of Bitcoin as a hedge tool like gold again proved fragile at the end of last week. When President Trump announced plans to impose new tariffs on Greenland and European countries, the price of Bitcoin fell significantly—eroding investor confidence in the “digital gold” narrative that has been one of the main attractions of crypto. With the price now sitting at $83,570 (down 6.38% in the last 24 hours), Bitcoin behaves more like a high-risk asset than a stable store of value.

Global Trade Tensions and Geopolitical Risks Trigger Massive Sell-Off

Trump’s tariff threat targeting Denmark and seven other European countries created a wave of fear in global financial markets. An automatic response emerged: stocks in Asia and Europe fell, gold hit all-time highs—a classic sign of an escape to a safe haven. However, Bitcoin is moving contrary to the “safe haven” narrative often put forward by its supporters.

This decrease in geopolitical pressure triggered a chain reaction across the crypto ecosystem. CoinDesk’s indices for memecoin, metaverse, computing, DeFi, and entertainment sectors slumped more than 7% in a matter of hours each. Bitcoin briefly touched a level close to $92,000 in early January, but has now retreated far from that momentum. “Bitcoin’s decline was driven by a combination of profit-taking and risk-off shifts as traders digested a sudden surge in U.S. political risks as well as geopolitical tensions,” said Samer Hasn, senior analyst at XS.com.

The Probability of Reaching $100K Drops Drastically in Polymarket

Market sentiment can be measured through the Polymarket decentralized betting platform, which is a barometer of Bitcoin price expectations. The “Yes” contract for Bitcoin’s prediction of reaching $100,000 at the end of January has collapsed dramatically—slumping from nearly 50% on Friday to just 27% at the time of writing, down significantly from 72% on January 15.

This decrease in probability reflects a fundamental shift in the way the market views Bitcoin. Instead of being seen as a store of value with defensive characteristics, this leading crypto is traded as a correlation instrument with global equity markets and sentiment. Every news of the escalation of international trade makes institutional and retail investors immediately reduce their exposure to risky assets, including Bitcoin.

Spot ETF Flows Remain Strong Despite Continued Turmoil

Although the short-term pressure is heavy, there are interesting signals from the institutional side. Bitcoin and Ethereum spot ETFs attracted $1.4 billion in funding and more than $500 million last week—an event that was the largest inflow since October. This data shows that despite the market sentiment being tested, institutional investors are still seeing long-term value in Bitcoin.

The activity of “whales” (holders of large wallets with 1,000-10,000 BTC) also shows continued confidence. In the past week, the number of whale addresses increased by 28%, indicating that the big players are still actively accumulating Bitcoin at lower price levels. This signal contradicts the panic narrative that dominates the retail market.

Key Factors for Market Recovery This Week

Bitcoin’s price action in the coming week will largely depend on the evolution of the US-European tariff situation. Laser Digital emphasized in its analysis note that “these bilateral tariff risks and ongoing geopolitical tensions in the Middle East will be the main drivers of volatility.”

Several major economic and political events will be the main focus of traders:

• This week’s Davos Forum, which will bring together global policymakers and business leaders
• Release of US GDP data and core personal consumption expenditure
• The long-awaited Supreme Court decision on the legality of Trump’s tariffs

If the tariff situation worsens, Bitcoin’s expectation of reaching the psychological level of $100,000 may have to be delayed further. However, if negotiations show signs of resolution, an already solid institutional flow could push a new narrative about Bitcoin as a hedge against macroeconomic uncertainty—albeit with more realistic expectations than the perfect “digital gold.”