President Trump’s obsession with buying Greenland just triggered the first major market rout of 2026.
Over the weekend, Trump announced 10% tariffs on eight European nations starting February 1, escalating to 25% by June 1, unless Denmark agrees to sell the Arctic territory. The response from global markets was swift and brutal: crypto shed $875 million in liquidations within 24 hours, Bitcoin tumbled below $93,000, and European stocks posted their worst session in two months. Gold, meanwhile, surged to a record $4,690 per ounce as investors fled to safety.
The targets include Denmark, Norway, Sweden, France, Germany, the United Kingdom, the Netherlands, and Finland. All NATO allies. All now facing economic retaliation because their governments refuse to support what European leaders are calling territorial blackmail.
Crypto Markets Take The First Punch
Bitcoin didn’t just dip on Trump’s announcement. It cratered.
The leading cryptocurrency plunged from $95,000 to $92,000 overnight, triggering a cascading liquidation event across exchanges. According to CoinGlass data, more than 240,000 traders saw their positions wiped out, with $788 million of those losses coming from leveraged long positions. Traders who bet the Trump administration’s pro-crypto stance would keep prices elevated got a harsh reminder that geopolitical risk doesn’t care about your thesis.
Ethereum dropped 2.9% to $3,207. Altcoins fared even worse, with many major tokens posting losses between 9% and 20% over 24 hours. The broader crypto market cap shrank from $3.24 trillion to $3.12 trillion, erasing more than $110 billion in value. The Crypto Fear & Greed Index flipped from “Neutral” to “Fear” in a single session.
Hyperliquid led exchange liquidations at $262 million, followed by Bybit at $239 million and Binance at $172 million. Over 90% of forced closures were long positions. Bitcoin volatility has returned with a vengeance, and this time the catalyst isn’t regulatory uncertainty or a Fed rate decision. It’s a real estate dispute over the world’s largest island.
Futures Tank On Thin Holiday Trading
U.S. equity markets were closed Monday for Martin Luther King Jr. Day, but futures told the story. S&P 500 futures dropped 1.2%, Dow futures fell 1%, and Nasdaq 100 futures slid 1.5%. The thin holiday liquidity amplified every move.
European stocks had no holiday to hide behind. Germany’s DAX tumbled 1.4%, France’s CAC 40 shed 1.8%, and the pan-European Stoxx 600 fell 1.3% in what Bloomberg called its worst day in two months. Luxury giant LVMH dropped more than 4%. German automakers Volkswagen and BMW each fell at least 3%, with markets pricing in the damage that 25% tariffs would inflict on their American sales.
The only European sector posting gains? Defense. Rheinmetall AG rose more than 2% as investors bet that transatlantic tensions will accelerate European military spending.
Gold Hits Record As Risk Assets Bleed
While crypto proved once again that it trades like a risk asset during geopolitical shocks, gold did exactly what gold is supposed to do. Spot prices surged 1.5% to $4,690 per ounce, a fresh all-time high. Silver climbed above $94 per ounce.
The dollar weakened against the yen and Swiss franc as traders repositioned into traditional safe havens. For all the talk of Trump’s crypto-friendly administration and Bitcoin’s “digital gold” narrative, when real fear hit markets, capital flowed to the metal that’s been a store of value for 5,000 years.
Europe’s United Front
The European response has been remarkably unified. All eight targeted nations issued a joint statement calling the tariffs “blackmail” that “undermine transatlantic relations and risk a dangerous downward spiral.” It’s the most forceful rebuke from European allies since Trump returned to the White House.
EU ambassadors convened an emergency meeting in Brussels on Sunday. The European Parliament immediately halted ratification of the EU-U.S. trade deal negotiated last July. German MEP Manfred Weber declared that “given Donald Trump’s threats regarding Greenland, approval is not possible at this stage.” The bloc is now preparing to reactivate €93 billion ($108 billion) in retaliatory tariffs that were suspended under last summer’s trade truce.
France is pushing to trigger the EU’s “anti-coercion instrument,” an untested weapon that could suspend U.S. investment protections and restrict American companies’ access to European service markets. European Commission President Ursula von der Leyen warned that “tariffs would undermine transatlantic relations and risk a dangerous downward spiral.”
British Prime Minister Keir Starmer was equally direct. “Applying tariffs on allies for pursuing the collective security of NATO allies is completely wrong,” he wrote on X. “Our position on Greenland is very clear: it is part of the Kingdom of Denmark and its future is a matter for the Greenlanders and the Danes.”
The Greenland Obsession
Trump’s interest in acquiring Greenland isn’t new. He floated the idea during his first term and got roundly mocked. But this time he’s wielding tariffs as a cudgel, framing the purchase as a national security imperative tied to what he calls the “Golden Dome” missile defense system.
The problem: Greenland isn’t for sale, and Greenlanders don’t want to be American. Protests erupted across the territory over the weekend. Danish Foreign Minister Lars Løkke Rasmussen called the acquisition demand “totally unacceptable” after meeting with Vice President JD Vance and Secretary of State Marco Rubio last week.
Reuters polling shows less than one in five Americans even support the idea. Spain’s Prime Minister Pedro Sanchez warned that a U.S. invasion of Greenland “would make Putin the happiest man on earth” by legitimizing Russia’s invasion of Ukraine and spelling “the death knell for NATO.” EU foreign policy chief Kaja Kallas noted that “China and Russia must be having a field day” as Western allies publicly fracture.
What Happens Next
Markets now face a three-week window before the February 1 tariff deadline. If Trump follows through, the EU has made clear it will retaliate. That means a potential $200 billion+ escalation in trade barriers between the world’s two largest economies.
Deutsche Bank’s George Saravelos warned that “weaponization of capital rather than trade flows would by far be the most disruptive to markets.” The real risk isn’t just tariffs. It’s the EU potentially restricting U.S. access to European capital markets and investment flows.
For crypto traders, the weekend carnage is a reminder that macro risk doesn’t disappear just because a president tweets about Bitcoin. The same Trump administration that promised to make America “the crypto capital of the world” just triggered the biggest liquidation event since October’s China tariff shock.
By Monday morning, Bitcoin and Ethereum had recovered roughly half their losses. Altcoins remained in the red. Gold kept climbing. And Davos, where world leaders are gathering this week for the World Economic Forum, just got a lot more tense.
The Greenland standoff isn’t over. Neither, it seems, is market volatility.
