Physical Address
304 North Cardinal St.
Dorchester Center, MA 02124
Global markets shrugged off risk on Tuesday after US Treasury Secretary Scott Besent publicly reaffirmed the Trump administration’s willingness to use tariffs as a primary geopolitical weapon. His comments eased fears of trade-driven inflation at a time when cryptocurrency markets were showing signs of stabilization.
Bitcoin fell below $90,000, while Ethereum fell below $3,000, with investors reassessing overall risks following Bessent’s comments at the World Economic Forum in Davos.
Sponsored
Sponsored
Fees are framed as leverage, not a last resort
During his speech in Davos, Bessant made it clear that tariffs remain a key focus of US foreign policy strategy. He described it as an effective tool and not just a temporary measure.
In response to the European reaction to the tariff threats related to Greenland, Bessant said in an interview with YouTubeSit down, take a deep breath, don’t respond in kind. The President will be here tomorrow and deliver his message.
The language indicated that the White House expected resistance from allies and was ready to escalate if necessary. Markets interpreted this as confirmation that… The risks of trade tensions are coming backespecially between the United States and Europe.
Bessent also revealed a clear timeline, noting that President Trump could impose 10% tariffs as early as February 1 if Denmark and allied countries refuse. Cooperation in Greenland.
Inflation risks return to the macro narrative
Going beyond geopolitics, Besant defended the tariffs as economically effective and played down fears that they would hit home.
Sponsored
Sponsored
Bessent said it was highly unlikely that the Supreme Court would overturn the president’s basic economic policy, noting that the tariffs had already generated “hundreds of millions of dollars” in revenue.
But this position contradicts recent research that shows that American consumers bear most of the costs of the tariffs.
New data from European and American economists suggest that tariffs act as a hidden consumption tax, tightening the liquidity of households over time.
This dynamic is important for the cryptocurrency market. Reduced discretionary spending and higher price pressures directly dampen speculative capital flows, particularly in highly volatile assets.
Sponsored
Sponsored
Markets react as price volatility returns
Bessent tried to downplay the bond market reaction following his comments, suggesting that the rise in yields was caused by unrest in Japan and not by US policies.
Bessent said that in the past two days, Japan has seen a movement of six standard deviations in its bond market, and said that it was difficult to isolate factors specific to the United States.
Traders, however, focus on the bigger picture: Renewed tariff threats, rising geopolitical tensions, and rising price volatility—This is a group of factors that have historically put pressure on digital currency markets.
Bitcoin’s inability to hold above 90,000 and Ethereum’s decline below 3,000 reflects this new valuation. Altcoins are falling further, in line with reduced leverage and reduced risk.
Sponsored
Sponsored
A familiar model for cryptocurrency markets
The current selloff reflects previous episodes where rate announcements drained liquidity without directly leading to a broader economic contraction.
Fees are one of the main reasons for cryptocurrencies have been in a range after the October liquidation shock, even when institutional interest has grown quietly. The events at Davos brought this danger to the fore.
Although Bessant underlined the strength of the US economy and the acceleration of private sector growth, the markets reacted less optimistically and focused more on policy directions.
Fees are emerging as a lever rather than a fallback option, signaling continued uncertainty, and cryptocurrencies remain one of the first assets to reflect this reality in their prices.
The message from Davos for now is clear: The risk of inflation associated with the trade war has been realizedCryptocurrency markets continue to adapt accordingly.
