Pressure on the sector, as with risk assets overall, intensified at the start of the week amid an escalation in U.S.–EU relations after U.S. President Donald Trump announced over the weekend plans to raise trade tariffs on eight European countries opposing the sale of Greenland—setting rates at 10.0% from February 1 and potentially up to 25.0% from June 1. In response, Brussels floated countermeasures including tariffs on U.S. imports totaling €93.0 billion, as well as restrictions on access to the EU financial market under the so-called Anti-Coercion Instrument (ACI). The prospect of a large-scale conflict between partners prompted investors to rotate out of cryptocurrencies into traditional safe havens, primarily gold. Yesterday, conditions partially stabilized after the U.S. president announced at the World Economic Forum in Davos that a framework agreement on Greenland had been reached, canceling the proposed tariffs and halting the negative momentum in major tokens. Nevertheless, prices have not shifted into recovery mode, as the deal’s parameters remain undisclosed and uncertainty persists. In addition, recently released U.S. GDP data for the third quarter showed growth of 4.4%, which—together with a stabilized labor market where unemployment fell from 4.5% to 4.4% in December—supports expectations that the Federal Reserve will maintain its current monetary policy at the January meeting. Some experts even допускают that borrowing costs could remain unchanged until the end of Chair Jerome Powell’s term in May, dampening investor appetite for risk assets.
Additional negative pressure comes from uncertainty surrounding U.S. Senate approval of the Cryptocurrency Market Structure and Transparency Act (CLARITY). A vote scheduled for January 15 was postponed following criticism from influential members of the crypto community. Coinbase representatives argued that the bill, in its current form, would effectively ban tokenized securities. It later emerged that leaders of the Senate Judiciary Committee from both parties called for amendments to strengthen oversight of money-transmission companies, warning that otherwise the framework could be exploited by fraudsters.
Overall, the digital asset market has reverted to a downward bias, as evidenced by continued ETF outflows and the return of the Fear & Greed Index to the “extreme fear” zone at a reading of 24. In the coming week, most assets are likely to consolidate or continue declining.
