The price of Bitcoin fell sharply on Monday, 19th January 2026, as former President Donald Trump's renewed threats of sweeping import tariffs against European nations triggered a flight to traditional safe-haven assets, unsettling cryptocurrency and foreign exchange markets.
Dollar Weakens Amidst Tariff Turmoil
Investors moved away from the US dollar after Trump announced over the weekend that he would impose an additional 10 per cent import tariff from 1 February on goods from several countries, including Britain, Denmark, France, and Germany. The condition for lifting these duties is that the US be allowed to purchase Greenland.
This move prompted European leaders to scramble in an effort to avert a trade war, agreeing on Sunday to intensify diplomatic efforts to dissuade Trump while simultaneously preparing retaliatory measures. In currency markets, the initial reaction saw a broad shift away from risk, benefiting classic shelters.
The Swiss franc headed for its largest daily gain against the dollar in a month, with the greenback falling 0.5% to 0.7984 francs. Contrary to typical expectations, the euro also gained, rising 0.3% to $1.163, while the pound sterling advanced 0.27% to $1.3415.
Cryptocurrencies and Global Currencies React
Cryptocurrencies, often viewed as a barometer for broader market risk sentiment, experienced significant declines. Bitcoin was down 2.5% at $93,011, and ether fell 3.5% to $3,223. This sell-off mirrored the cautious mood that gripped traders globally.
Analysts noted the market's behaviour echoed patterns seen in the previous year. Khoon Goh, head of Asia research at ANZ, observed that heightened policy uncertainty from the United States has recently tended to translate into dollar weakness rather than weakness in the targeted currencies. This dynamic was evident after Trump unveiled wide-ranging tariffs in April 2025, which triggered a crisis of confidence in US assets.
However, experts cautioned against writing off the dollar's enduring appeal. Jane Foley, chief currency strategist at Rabobank, highlighted the unmatched size and liquidity of US markets. "The sheer size of the (U.S.) market means that there is always going to be some safe-haven value associated with U.S. assets," she stated, warning that a further escalation could still see capital flow back to the dollar.
Yen and Yuan in Focus
The Japanese yen, another traditional safe haven, saw more contained movement, with the dollar edging slightly lower to 158 yen. Analysts at MUFG noted that domestic political concerns in Japan, including a looming snap election, were counterbalancing its safe-haven appeal. They remained sceptical that any intervention by Tokyo to support the yen would be successful without supportive fundamental factors.
Elsewhere, the onshore Chinese yuan climbed to a 32-month peak against the dollar, reaching 6.9630. This rise came despite mixed economic data showing China's economy met its 5.0% growth target for the previous year by capturing a record share of global goods demand to offset domestic consumption weakness.
The day's events underscored the fragile state of global trade relations and the immediate impact of geopolitical rhetoric on financial markets, from established foreign exchange pairs to volatile digital assets like Bitcoin.
