Trump Calls Off Greenland Tariffs, Markets Rebound as Risk Fades

Bitcoin and global markets rebounded sharply after US President Donald Trump said he would not proceed with tariffs linked to Greenland. The announcement erased trade war fears that had rattled investors earlier in the day.

Bitcoin climbed back toward $90,000, recovering from intraday lows below $89,000, while Ethereum rebounded toward $3,000 after briefly slipping under that level. US equities also stabilized, with the S&P 500 turning higher following earlier losses. Gold, which had risen on geopolitical risk, pared gains.

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Greenland Tariff Fears Had Driven Risk-off Moves

The market reaction followed Trump’s statement that a framework agreement had been reached with NATO Secretary General Mark Rutte, reducing the likelihood of imminent trade action against European allies.

Earlier in the session, markets sold off after Trump and senior US officials revived aggressive tariff rhetoric at the World Economic Forum in Davos. 

Crypto Markets Rebound After Trump Calls off Greenland Tariffs. Source: CoinGecko

Investors reacted to the renewed use of tariffs as a geopolitical lever, particularly after Treasury Secretary Scott Bessent defended tariffs as an effective negotiating tool.

Bessent warned foreign governments not to retaliate, saying, “Sit back, take a deep breath. Do not retaliate,” while reiterating that tariffs remain central to US economic and security strategy.

Crypto markets fell alongside equities as investors priced in higher inflation risks, tighter liquidity conditions, and renewed global trade uncertainty. 

Bitcoin dropped below $90,000, while Ethereum slid under $3,000, reflecting crypto’s sensitivity to macro risk shocks.  

As that risk fades with the latest update from the US president, markets have shifted. Risk assets show early signs of recovery. Meanwhile, Gold prices immediately dropped following the announcement. 

Gold Price Falls After Trump Cancels Greenland Tariffs. Source: TradingView

Reversal Validates Macro-Driven Crypto Flows

The rapid recovery highlights how closely crypto markets are now tied to macro and policy signals, particularly around inflation and trade. 

Earlier analysis showed that tariffs imposed over the past year have largely been absorbed by US consumers. The data reinforced concerns that renewed trade escalation could delay rate cuts and tighten financial conditions.

That backdrop had already weighed on digital assets since October, contributing to range-bound price action and repeated failed rallies above key resistance levels.

Once the immediate tariff threat was removed, risk appetite returned, triggering short-covering and spot buying across crypto and equities. The S&P 500 erased losses, while Bitcoin stabilized after a volatile session.

S&P 500 Reverses Earlier Losses. Source: Google Finance

While markets welcomed the de-escalation, uncertainty remains. Trump said further discussions are ongoing regarding Greenland’s strategic role in missile defense and Arctic security, suggesting the issue is not fully resolved.