What happened today? 20 Jan 26'
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Since that Sunday midnight, Bitcoin has never recovered, dropping from $95k to $88.5k. It remains the asset most reactive to geopolitical tension. While Bitcoin attempts to position itself as a risk-off asset, during universal shocks it trades in line with market sentiment. Conversely, Gold rips higher, trading as the true safe haven that sustains its philosophy as the reserve, risk-off asset—the door central banks, pension funds, and smart investors walk through. When debt and international geopolitical conflicts escalate, even allies avoid holding each other’s debt. As Ray Dalio noted in Davos, the monetary order is breaking down.
Being crypto native and a tech believer, I tend to have a bias toward positivity. However, the situation regarding Greenland and the broader Europe-US conflict crushed the open market, causing the SP500’s worst day in three months. Bitcoin destroyed its start-of-the-year momentum and is now trading underwater for the year, failing to hold support even after Saylor bought $2.1b over the last seven days. Heavy selling pressure is evident, and the lack of momentum for Bitcoin reflects a lack of positivity in the altcoin market. Historically, a lack of support can lead to fading momentum and continued bearish pressure. I dislike this outcome; the trade was simple, but I failed to execute it because I did not set aside my bias. In geopolitical shocks, capital moves from risk-on to risk-off, leading to a dump in stocks to buy Gold and precious minerals. These shocks often happen overnight or on weekends, Bitcoin remains the most reactive asset on those periods. Shorting Bitcoin and buying GOLD during these shocks yielded significant performance. With Bitcoin down -6.8% from the weekend and Gold up +3.2%, the combined trade offered over +10% in a few days.
We have no new information regarding Greenland, but tariffs will likely flow to the market as US-Europe tensions escalate. A Danish pension fund is selling all US treasuries until the end of January due to rising credit risk under Trump, stating that “US finances are no longer sustainable, due to weak fiscal discipline.”. US removed over 200 NATO members, and the Pentagon is reducing participation in advisory groups. Threats continue from Trump implying that if they don’t hand over Greenland, there is no NATO.
Danish Prime Minister Mette Frederiksen stated they will not abandon Greenland, warning that while she hopes to avoid measures “such as the bazooka,” they must respond if the US imposes tariffs. Greenland Prime Minister Jens-Frederik said they are preparing for a potential invasion. Macron warned that “tariffs are fundamentally unacceptable, specially when they are used as leverage against territorial sovereignty.” He advocates for a “Europe first” approach, rejecting the peace board, which led Trump to threaten a change of opinion via a 200% tariff.
Trump is posting AI-generated images on Truth Social showing the US, Canada, Venezuela, and Greenland as US territory. While likely a move to create noise and test reactions, it carries a ping of truth regarding control. The US imported over 50 tons of oil from Venezuela and captured “illegal” ships. The emerging question is why these oil belongs to the US rather than Europe or Brazil. I hope when 2500 year people study history don’t look to 2026 as the year where US started is own colonialism. If true, we will all suffer, and economic warfare via tariffs is one method, and letting “colonies” die poor is an indicator we must track.
At Davos, Bessent noted that since 1980, the US has spent over $22T on NATO—two-thirds of its outstanding debt—arguing that the US defends the world, not Europe. He emphasized Greenland’s strategic importance and urged Europe not to escalate.
Despite my crypto bias, the tariff playbook mentioned yesterday suggests we are peaking in tension. With Trump at Davos tomorrow, I believe we will see the first signs of market relief. I expect Bitcoin and stocks to bottom while Gold pulls back a little bit, for a short period of time. We must follow the news closely, as Bitcoin will be the reactive asset if positive headlines emerge. To increase the confidence, JPMorgan shares this view, stating, “we are caution optimism that the apparent chaos over Trump’s Greenland plans, will eventually de-escalate... Trump creates noise and throws in maximal stance designed to trigger negotiation.”
Bitcoin has seen negative performance for six days in a row; data shows that hitting five days usually predicts positive performance over the next ten days with high confidence.
Meanwhile, at Davos, Brian Armstrong reiterated that stablecoin rewards are the main issue in the bill, banks are lobbying against crypto companies. He argued that crypto offers solutions like DeFi lending, whereas banks lend fractional deposits without clear permission. The NYSE’s creation of a tokenized version further proves crypto is updating the financial system, and Bermuda has partnered with Circle and Coinbase to build an onchain economy.
Nasdaq CEO Adena Friedman described AI as a transformative “super cycle” that lowers barriers to entry for new businesses. However, Anthropic CEO Dario Amodei warned that while AI drives growth, it risks job losses and inequality, necessitating government intervention. Microsoft’s Satya Nadella added that to avoid a bubble, benefits must be evenly spread to bend the productivity curve. Currently, AI stocks are struggling. Nvidia is down -4% today and -16% from its October 2025 high. ORCL is down -5% today and -48% from its peak. PLTR is down -1.5% today. All three peaked in late 2025 and trended down. Bitcoin has been following this trend, trading more in line with NVDA and the tech industry than as a reserve asset. Consequently, if there is an AI bust, Bitcoin will likely suffer the most.