Bitcoin experienced a notable decline on Tuesday, falling approximately 3% to trade near $90,298 by 10:16 ET (15:16 GMT), reversing much of the recovery it had made mid-January. This downward movement brought the cryptocurrency closer to levels last observed at the start of the year. Amid heightened geopolitical uncertainty, investors have shown a preference for tangible safe-haven assets such as gold, steering away from riskier speculative positions.
The crypto market's fragility also reflects delays in legislative progress on a key U.S. cryptocurrency regulatory bill designed to formalize a federal framework for the sector. Lawmakers postponed discussions after objections were raised by Coinbase Global Inc (NASDAQ:COIN) concerning several elements within the proposed bill. Such delays contribute to investor caution, impacting prices across the market.
The geopolitical backdrop has been intensified by U.S. President Donald Trump’s recent statements concerning Greenland. On Monday evening, Trump announced plans to address matters related to Greenland during his attendance at the World Economic Forum in Davos, Switzerland. Though details on meeting counterparts were not specified, several European state representatives are present at the forum.
President Trump reiterated his position advocating for U.S. ownership of Greenland, emphasizing the island's strategic importance to national security interests. His advancement of this agenda included threats of imposing tariffs on eight European nations to compel a transfer of control. These aggressive moves negatively impacted global markets during the week.
Additionally, Trump has yet to clarify whether military measures would be employed to fulfill his Greenland ambitions, leaving political leaders in Europe rejecting the demands strongly and preparing retaliatory actions should tariffs proceed. The resulting escalation in geopolitical strain has broadly suppressed appetite for cryptocurrencies, assets known for their vulnerability during heightened uncertainty.
On the crypto trading front, liquidation of long positions continues at a robust pace. Data from Coinglass reveal that over $260 million worth of long positions in Bitcoin and other cryptocurrencies were liquidated in the preceding 24 hours, contributing to nearly $900 million of liquidations earlier in the week.
Retail investors in the United States continue to demonstrate cautious sentiment toward Bitcoin. This is evident in the Coinbase Bitcoin Premium Index, which indicates that Bitcoin is trading at a discount in U.S. markets relative to its global price average.
Meanwhile, substantial institutional activity contrasts this retail hesitancy. Strategy, reportedly the largest publicly listed corporate Bitcoin holder, made a significant acquisition last week by purchasing 22,305 Bitcoin at an average price of approximately $95,284 per coin, totaling around $2.13 billion. This purchase extends the company’s accumulation trend, increasing its holdings to 709,715 bitcoins across its position. The average cost per coin for this corporate holding stands at approximately $75,979 after total expenditures amounting to $53.92 billion.
The broader cryptocurrency market largely retreated on Tuesday, with Ether, the second-largest cryptocurrency by market capitalization, falling 6.3% to about $3,013.88. Other notable tokens such as XRP and Binance Coin (BNB) also declined by 3% and 2.6%, respectively.
Altcoins like Cardano and Solana saw their prices decrease by 2.4% and 4.1%, respectively. Memecoins presented similar losses: Dogecoin dropped 2.4%, while the $TRUMP token declined 1.6%, retreating below the $5 threshold this week.