President Trump’s Greenland tariff threat causes Bitcoin to plummet, but prediction markets keep annexation unlikely as analysts emphasize macro and structural issues $BTC request.
summary
- President Trump’s 10-25% tariffs on Greenland and eight European allies triggered a sharp but short-lived risk-off move in Bitcoin and stocks.
- Polymarket odds place a U.S. takeover of Greenland unlikely as prediction markets reflect sentiment but face liquidity and regulatory constraints, analysts say.
- Experts believe that the fate of Bitcoin will be determined more by macro policies and structural demand than by tariff noise, and there are some cautionary trends. $BTC The bid remains structurally weak.
Former President Donald Trump announced on January 17 that he would impose 10% tariffs on products from eight European countries for opposing the annexation of the autonomous Danish territory of Greenland. Tariffs are scheduled to rise to 25% on June 1st.
President Trump’s focus on Greenland policy suggests concerns about Bitcoin price
According to President Trump’s statement on “Truth Social,” U.S. NATO allies Denmark, Finland, France, Germany, Norway, the Netherlands, the United Kingdom, and Sweden will be subject to tariffs starting February 1.
This announcement caused a decline in risk assets. Bitcoin fell nearly 7% on the statement, and the S&P 500 fell 2% on Tuesday, extending losses from the previous session.
However, prediction markets are expressing skepticism about the possibility of a Greenland acquisition. According to Polymarket data, there is a 20% chance that the US will acquire Greenland by December 31, 2026, and a 30% chance by March 31 of this year.
“Prediction markets are gaining prominence in the market for predicting political outcomes, but they are not always accurate,” said Ilya Otichenko, chief analyst at cryptocurrency exchange CEX.io. “These are best taken as additional signals rather than definitive measures. They can help gauge sentiment and probability, but the numbers should not be taken at face value without broader context.”
Otichenko warned that illiquidity, regulatory uncertainty and speculative behavior could distort prices in prediction markets.
Crypto-based prediction markets have experienced significant growth in recent years. Industry analysts say transaction value in this sector is expected to reach about $40 billion by the end of 2025, an increase of more than 400% year-on-year. Analysts said that with U.S. regulatory clarity, institutional participation and changing information consumption patterns, the sector could rival the $300 billion global sports betting industry by 2026.
The space is dominated by platforms Polymarket and Kalshi, which have expanded beyond crypto-native users to mainstream users. Real-world events such as politics, sports, culture, and economic indicators have become tradable instruments. During the recent US election cycle, Polymarket reported an increase in trading volume as users bet on outcomes ranging from presidential elections to interest rate decisions.
Georgiy Verbitsky, founder of crypto yield platform Timio, said predicted market prices “reflect a consensus on probabilities, rather than directional bets by crypto traders.” Verbitsky said the market has “matured into a fairly reliable tool for assessing political risk,” adding: “The low probabilities assigned to extreme outcomes like the Greenland takeover suggest that participants are distinguishing between political noise and realistic scenarios, and are doing so with reasonable accuracy.”
Analysts say the cryptocurrency market’s reaction to President Trump’s tariff announcement is consistent with the pattern observed during previous tariff-induced volatility, with cryptocurrencies initially selling off along with equities until stabilizing.
“So far, the market reaction looks more like short-term volatility than a structural macro shift,” Otichenko said. “The impact is smaller than that seen in early March 2025, when U.S. steel and aluminum tariffs triggered EU countermeasures. At that time, price movements were largely localized.”
Otichenko said similar actions could occur again “due to short-term risk-off movements rather than sustained trend changes, unless the conflict escalates into a more serious conflict.”
Although Bitcoin has developed a reputation as a store of value similar to gold, it continues to behave like a high-risk asset during times of geopolitical uncertainty, often moving in correlation with stocks as traders reduce their exposure.
Trump’s tariff threats represent a return to the protectionist policies that characterized his first presidency, when taxes on Chinese goods and European metals prompted retaliation and disrupted markets. President Trump first proposed purchasing Greenland in 2019, but Denmark rejected it.
Analysts say the Arctic region, with a population of 55,000 people, has strategic value due to its location along emerging shipping routes and its reserves of rare earth minerals used in the defense industry and clean energy technology. President Trump has characterized his interest in Greenland as a “national security” issue, but analysts predict any acquisition would face significant political and legal hurdles. According to reports, some European countries are sending troops to protect Greenland from potential US action.
“A potential takeover of Greenland would have broader geopolitical implications,” Otichenko said, adding that “President Trump also has a history of shying away from high-stakes scenarios, which helps explain the low probabilities seen on prediction platforms.”
Some analysts say Bitcoin’s long-term trajectory will depend less on trade disputes and more on macroeconomic factors such as central bank policy, inflation trends, and institutional adoption.
“Generally speaking, we expect Bitcoin prices to initially decline in the short term in response to tariffs and market volatility,” said John Haar, managing director at Swan Bitcoin. “However, after a short-term reaction, market participants realized that tariffs ultimately had less of an impact on Bitcoin’s trajectory than other factors such as central bank policy, government spending, inflation, and adoption, all of which continue to support Bitcoin.”
Verbitskii offered a contrasting view, saying that Bitcoin currently faces structural weaknesses. “There is clearly a lack of sustained demand from major buyers,” Berbitsky said. “In such an environment, risk-on events, including President Donald Trump’s new tariff statements, tend to increase pressure.” $BTC It lowers very quickly. The market is treating these headlines as short-term volatility triggers rather than fundamental macro shifts, but their sensitivity speaks for itself. ”
“Until structural demand returns and market regimes change, geopolitical shocks are likely to add downward pressure rather than strengthen Bitcoin’s hedge story,” Verbitsky added.
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