Bitcoin (BTC) experienced a dramatic crash of nearly $4,000 in a single hour, dropping to around $92,000 on January 18-19, 2026. The sell-off was triggered by escalating trade tensions after former US President Donald Trump announced a 10% tariff on eight European Union countries—Denmark, Norway, Sweden, France, Germany, the United Kingdom, the Netherlands, and Finland—effective February 1, 2026, with plans to increase to 25% by June 1. The tariffs are tied to a US demand to purchase Greenland.
The market reaction was swift and divergent. While risk assets sold off, gold surged to a new all-time high of $4,690 per ounce, and silver also broke records, surpassing $94 per ounce. This highlighted gold's traditional role as a safe-haven asset during geopolitical and economic stress. In contrast, Bitcoin traded in line with risk-off sentiment, with the total cryptocurrency market capitalization falling by nearly $98 billion.
The price drop triggered massive liquidations in the crypto market, totaling $864.35 million over 24 hours, with long positions accounting for over $780 million. Notably, $500 million in leveraged long positions were wiped out in just 60 minutes.
Analysts offered contrasting views on Bitcoin's trajectory. Some, like Bloomberg Intelligence's Mike McGlone, suggested the Bitcoin-to-gold ratio could continue declining toward 10x, indicating sustained gold outperformance. Economist Peter Schiff argued that Bitcoin's failure to match gold's rally undermines its "digital gold" narrative. However, other market watchers remain optimistic, expecting capital rotation from gold's $10 trillion market cap expansion into Bitcoin later in the cycle.
The European Union is considering a robust countermeasure package worth up to €93 billion ($107.71 billion), which could include tariffs or market restrictions on US companies. This escalation threatens trade flows worth nearly $1.5 trillion, adding significant uncertainty to global risk sentiment, which analysts warn is bearish for stocks, the dollar, and cryptocurrencies.
