Why does Trump's dispute over Greenland affect Bitcoin?

Source: PortaldoBitcoin Original Title: Why Trump’s Dispute Over Greenland Affects Bitcoin? Original Link: https://portaldobitcoin.uol.com.br/por-que-a-disputa-de-trump-pela-groenlandia-esta-afetando-o-bitcoin/ The recent drop in Bitcoin, which fell back to the US$ 90,000 level after a strong wave of selling over the weekend, is a direct reflection of the increasing global geopolitical uncertainty, not structural weaknesses in the crypto market. The trigger was the escalation of the U.S. president’s rhetoric regarding control over Greenland, accompanied by threats of new trade tariffs against European countries, reigniting fears of a trade war between the U.S. and the European Union.

As the situation worsened, nearly US$ 1 billion in leveraged positions were liquidated within a few hours, while Ethereum, XRP, Solana, and other altcoins followed Bitcoin in the decline.

Analysts say the episode reinforces the sensitivity of cryptocurrencies to macroeconomic shocks. Min Jung, from Presto Research, noted that the crypto sector continues to underperform compared to other risk assets, even on days when Asian markets remained stable, indicating a specific fragility of the digital market at this moment.

Meanwhile, Rony Szuster, Head of Research at a major cryptocurrency platform, emphasizes that the dispute involving Greenland should be understood less as an immediate military risk and more as a factor of economic instability. According to the analysis, the key point lies in the chain reaction caused by the announced tariffs and the threats of retaliation from the European Union.

Tariffs and Trade Retaliation

Over the weekend, tariffs of 10% (with the possibility of increasing to 25%) were announced against products from Denmark, Norway, Sweden, France, the United Kingdom, the Netherlands, and Finland, as these nations moved to protect Greenland. In response, the EU threatens tariffs of up to 93 billion euros on American imports.

Economic Impacts and Risk Aversion

According to analysts, the main transmission channel of this shock to Bitcoin is through inflation and monetary policy. “Higher tariffs make imported goods more expensive, pressure inflation, and reduce the room for rate cuts by the Federal Reserve.” With interest rates higher for longer, global liquidity tends to become more restricted, favoring fixed-income assets and penalizing risk assets like stocks and cryptocurrencies.

This dynamic helps explain why Bitcoin, despite often being presented as a store of value in the long term, reacts negatively in the short term to this type of news. Experts believe that the asset still mostly behaves as a risk instrument in environments of macroeconomic stress. “In risk-averse scenarios, investors reduce exposure to more volatile assets, regardless of the long-term structural thesis.”

It is also important to highlight that Greenland itself has strategic importance beyond political rhetoric. The region is relevant for military reasons, Arctic trade routes, and access to natural resources such as rare earths. Still, analysts consider a concrete military advance unlikely. “The baseline scenario remains negotiation and economic pressure, not armed conflict.”

Technical Perspective

On the technical side, analysts observe that geopolitical news has accelerated a correction already underway. Bitcoin had become more vulnerable after delays in regulatory initiatives in the U.S. With the escalation of trade tensions, the loss of important technical levels, such as the 50-week moving average, intensified algorithmic selling and forced liquidations.

Despite the intensity of the movement, experts emphasize that the scenario is still far from characterizing a new “crypto winter”. Drops caused by macro shocks tend to be faster and more reversible, provided there is no prolonged deterioration of global economic conditions. “What the market is pricing now is the risk of higher interest rates for longer, not a structural breakdown of the crypto ecosystem.”

Final Considerations

In summary, the recent drop in Bitcoin is not directly related to the dispute over Greenland itself, but to the domino effect generated by the escalating rhetoric between the U.S. and Europe. The combination of tariffs, potentially higher inflation, and more restrictive monetary policy reduces risk appetite in the short term. As long as this environment of uncertainty persists, the crypto market is likely to remain volatile, reacting more to macro news than to its own fundamentals.