Gold Reaches All-Time High as Bitcoin Declines Amid Rising US-EU Tariff Tensions

In a stark divergence, gold and Bitcoin (BTC) moved in opposing directions as tariff tensions intensified between US President Donald Trump and the European Union (EU). While gold surged to record highs due to increased geopolitical uncertainty, Bitcoin experienced a decline. This shift has reignited discussions about the future trajectories of these two assets.

Key Takeaways

Gold reached record highs while Bitcoin declined amid escalating US-EU tariff tensions.
President Trump imposed tariffs on several European countries, triggering emergency EU talks.
Gold surged to $4,690 per ounce, while Bitcoin fell below $95,000 following significant liquidations.
Analysts are divided on Bitcoin's role as a safe haven, with predictions of further declines or potential recoveries.

With these developments, investors are closely watching how these market dynamics will unfold.

Escalating US–EU Trade Tensions

On January 17, 2026, President Trump declared a 10% tariff on several European nations including Denmark, Norway, Sweden, France, Germany, the United Kingdom, the Netherlands, and Finland, which will take effect on February 1. This tariff will escalate to 25% by June 1, contingent upon reaching an agreement for the US to purchase Greenland.

In response, representatives from the affected nations held urgent discussions over the weekend. In a collective statement, President Costa and President von der Leyen affirmed the EU’s “full solidarity” with Denmark and the people of Greenland, indicating a united political stance against the US's latest measures. Additionally, the Financial Times revealed that the EU is considering a broader retaliatory package that could impose tariffs totalling up to €93 billion ($107.71 billion) or restrict American companies from accessing the EU market.

Investor Behavior: Gold Gains While Stocks and Bitcoin Drop

The markets swiftly responded to the tariff announcements, but in contrasting fashions. During early trading hours in Asia, gold prices surged to $4,690 per ounce, achieving a new historical high. Silver also climbed to over $94 per ounce. Meanwhile, the stock market opened lower, showing signs of concern. The futures for major indices reflected this dip:

S&P 500: -0.7%
Nasdaq 100: -1%
Dow Jones: -0.5%
Gold: +1%
Silver: +3%

In a related movement, Bitcoin also faced downward pressure as it followed the broader decline of risk assets. According to BeInCrypto Markets data, BTC fell below the $95,000 mark, trading at $92,574 at the time of this report—a drop of 2.67% in the last 24 hours. The combined market capitalization of cryptocurrencies decreased by nearly $98 billion during this timeframe. The price drop led to significant liquidations: over the past 24 hours, total liquidations hit $864.35 million, with more than $780 million in long positions being liquidated.

“The price of Bitcoin plummeted by nearly $4,000 as $500 million worth of leveraged long positions were liquidated in just one hour,” reported The Kobeissi Letter. The divergence between gold and Bitcoin during this tariff-related turmoil highlights the contrasting perceptions of these assets. While gold is widely recognized as a reliable store of value during economic stress, Bitcoin’s performance indicates that it continues to behave like a risk asset, heavily influenced by market sentiment rather than immediate demand for safety.

What Lies Ahead for Bitcoin in January?

Analyst Timothy Peterson provided valuable insights into Bitcoin’s delayed response to Trump’s tariff announcement. He noted that although Bitcoin trades continuously, its price didn’t react for approximately 36 hours after the announcement, only starting to decline with the onset of institutional trading in Asia.

“This shows that most intraday ‘news’ about price movements is generally an irrelevant narrative constructed after the fact. Moreover, traders were heavily leveraged, even after more than a day of warning about the tariffs (This is not the first tariff announcement by Trump; Bitcoin has struggled every time),” he emphasized.

Crypto analyst Rover cautioned that the current week could impact the entire market due to a mix of key policy developments that might induce volatility in stocks and cryptocurrencies. “The EU's tariffs could jeopardize trade amounts worth nearly $1.5 trillion,” he warned. He explained that if the EU begins forming trade agreements with countries under US sanctions, the US risks losing access to crucial trade routes, which would negatively affect global market sentiment, US stocks, and the dollar.

The expected decision from the Supreme Court on the tariffs also adds complexity, possibly unsettling markets, as either outcome could exert pressure on stocks and cryptocurrencies alike.

Experts remain divided on Bitcoin's potential performance. According to Mike McGlone from Bloomberg Intelligence, the Bitcoin-to-gold ratio is likely to decline towards 10x, indicating that gold will continue to outperform Bitcoin instead of the latter rebounding to a 30x ratio in its favor.

“While many anticipate Bitcoin will follow gold’s lead and reach new highs, the market has allowed speculators excessive time to buy. What seems more probable is that Bitcoin’s inability to mirror gold’s growth undermines its narrative as ‘digital gold,’ possibly leading to a dramatic crash,” remarked economist Peter Schiff.

Traders like Peter Brandt suggested that assets denominated in US dollars might underperform compared to physical commodities. He expressed uncertainty regarding Bitcoin’s role during this shift, predicting that altcoins would depreciate in value substantially.

“Gold will regain its status as the most reliable store of wealth. Dollar-denominated assets will devalue against physical commodities—which may or may not include Bitcoin. Altcoins are likely to lose more value than USD,” stated the veteran trader.

Despite these grim predictions, some analysts remain hopeful, suggesting that Bitcoin could eventually align with gold’s performance. “Gold saw an increase of about $10 trillion in market capitalization last year. It wouldn’t be surprising if some of those profits are diversified into Bitcoin,” remarked a market observer.

As trade tensions rise and risk appetite wanes, the market is poised to reveal whether Bitcoin can recover or if gold will continue to stand as the primary safe-haven asset.