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Before his U-turn, the new tariff measures imposed by Donald Trump on the United States’ main trading partners, notably Canada, Mexico, and China, sent shockwaves through financial markets. These additional tariffs—25% for Canada and Mexico and 10% for China—triggered a sharp decline in stock markets and cryptocurrencies. Altcoins were particularly affected. According to analysts, more than $2 billion were liquidated in crypto markets within 24 hours, with Bitcoin dropping to a low of $91,600, its lowest level in three weeks.
Bitcoin’s price eventually rebounded sharply, surpassing $102,000 following the announcement of a 30-day reprieve on U.S. tariffs against Mexico and Canada. However, this calm was short-lived as China’s announcement of new tariffs on several American imports—including coal, liquefied natural gas, crude oil, and certain agricultural and automotive equipment—shook the markets. This retaliation followed the implementation of additional U.S. tariffs on Chinese goods. Beijing justified these measures by accusing Washington of violating World Trade Organization (WTO) rules. At the same time, China tightened export controls on strategic metals such as tungsten, tellurium, and indium, citing the need to protect its national interests.
Bitcoin is currently fluctuating between $98,000 and $100,000 in an environment of heightened volatility. This pullback follows a rebound above $100,000 on Monday, triggered by the temporary suspension of tariffs between the U.S. and Mexico announced by Donald Trump. However, the threat of a trade escalation with China is weighing on risky assets, including cryptocurrencies, as highlighted by Min Jung, an analyst at Presto Research. He noted that while Bitcoin is often compared to digital gold, many investors still perceive it as a speculative asset sensitive to global economic tensions.
In contrast, gold continues to establish itself as a safe haven in times of uncertainty, reaching a historic high above $2,820 on Monday. This surge is fueled by increasing financial market volatility, particularly in cryptocurrencies and U.S. equities. The announcement of new tariffs by China in retaliation for U.S. measures has strengthened demand for gold, while investors await key U.S. employment data that could influence upcoming monetary policy decisions.
Meanwhile, Bitcoin has experienced significant fluctuations. Despite a rebound, the cryptocurrency remains more than 9% below its all-time high of $108,000, reached on January 20, 2025. Unlike gold, often perceived as a stable safe-haven asset, Bitcoin remains a high-risk asset due to its heightened volatility and relative youth in financial markets. Analysts point out that while Bitcoin is sometimes dubbed “digital gold,” it has yet to attain the same long-term security status.
U.S. stock market indices also reflect this uncertainty, with slight declines in futures contracts on the Dow Jones, S&P 500, and Nasdaq. Volatility indicators, such as the VIX index, have risen significantly, signaling a tense market environment. Investor nervousness stems largely from the potential impact of new U.S. tariffs on inflation and economic growth, prompting some market participants to turn to safer assets like gold.
Exchange-traded funds (ETFs) backed by Bitcoin saw strong demand in January, with net inflows totaling approximately $5.25 billion, up from $4.53 billion in December 2024. This increase comes amid renewed interest in digital assets, particularly following Donald Trump’s return to the White House. BlackRock dominated the market with its IBIT ETF, which attracted $3.23 billion over the month, bringing its net assets to $59.39 billion—a $7.67 billion increase. The second-largest Bitcoin ETF, Fidelity’s FBTC, also benefited from this trend, recording $1.28 billion in inflows in January. Its assets under management grew from $18.87 billion to $21.76 billion. Matt Hougan, Chief Investment Officer at Bitwise, anticipates that Bitcoin ETFs could attract more than $50 billion throughout 2025, though he cautions that these flows remain subject to significant monthly variations.
Investment flows into Ethereum-linked ETFs slowed significantly last week, recording a net balance of zero for the first time since their approval in the U.S. This stagnation is attributed to increased cryptocurrency market volatility, exacerbated by concerns over the trade tensions triggered by Donald Trump’s tariff measures. Ethereum was particularly affected, hitting a low of $2,368 on Monday morning before stabilizing around $2,740. According to James Butterfill, Head of Research at CoinShares, sentiment toward ETH remains bearish, mainly due to its close ties with the tech sector and global growth prospects. The ETH/BTC ratio has reached lows not seen in four years.
Crypto markets were further shaken by the massive sell-off in tech stocks, sparked by the announcement of a low-cost artificial intelligence model developed by the Chinese startup DeepSeek. This advancement prompted investors to withdraw from U.S. AI-related companies, leading to a decline in cryptocurrency prices. However, Bitcoin withstood this trend better, benefiting from an inflow of $486 million into global investment funds, which helped its recovery after a difficult start to the week. Overall, more than $1 billion was injected into crypto funds at the end of the week, though this figure remains below the $2 billion recorded the previous week following Trump’s inauguration.
Donald Trump’s announcement of the creation of a U.S. sovereign wealth fund immediately excited Bitcoin supporters. This fund, set to launch within the next 12 months, is seen by some crypto investors as a potential first step toward direct U.S. government involvement in digital assets. Senator Cynthia Lummis, a staunch Bitcoin advocate, fueled speculation by reacting enthusiastically on social media. A sovereign wealth fund is a state-owned investment vehicle that manages public revenues—often derived from natural resource exports—and allocates them to profitable assets such as stocks, bonds, or real estate. Some U.S. states, like Alaska and Texas, already have such funds, but there is currently no federal-level sovereign wealth fund.
In other countries, several sovereign wealth funds already have exposure to the cryptocurrency market. For example, Norway’s sovereign wealth fund—the largest in the world—indirectly holds nearly $400 million in Bitcoin. Meanwhile, Abu Dhabi’s fund regularly invests in digital asset projects. Despite these examples, there is no guarantee that the U.S. will follow suit, especially since the Federal Reserve currently holds no reserves in cryptocurrencies. It remains to be seen whether political figures like Cynthia Lummis have concrete reasons to believe Bitcoin could be integrated into this sovereign wealth fund or if they are simply expressing their desire for broader U.S. adoption of digital assets. For now, this initiative merely fuels debate about Bitcoin’s role in the country’s financial strategy without providing any clear indication of potential government investment in the cryptocurrency.
After spending $20 billion on Bitcoin over the past 12 weeks, MicroStrategy has temporarily paused its cryptocurrency purchases. The company, which has repositioned itself as a true “Bitcoin treasury,” had been making massive acquisitions since the end of last year. However, its co-founder and chairman, Michael Saylor, announced on social media that the company made no Bitcoin purchases last week and did not issue any new Class A shares under its ongoing financing program. MicroStrategy currently holds 471,107 Bitcoins, valued at approximately $46.6 billion, for a total investment of $30.4 billion. Its “21/21” strategic plan, announced last year, aims to raise $42 billion to increase its Bitcoin reserves—$21 billion through equities and $21 billion through fixed-income securities. Initially specializing in data analytics, the company is now viewed as an investment vehicle allowing shareholders to gain indirect exposure to Bitcoin without holding it themselves.
Tether, the issuer of the world’s largest stablecoin, has announced the integration of USDT on the Bitcoin network and the Lightning Network, a scaling solution designed to accelerate transactions and reduce costs. Paolo Ardoino, CEO of Tether, revealed this news during a Bitcoin conference in El Salvador. This initiative marks a major milestone for the cryptocurrency industry, linking USDT’s stability to the resilience of the Bitcoin network, which, until now, had not attracted massive user adoption for transactions on its main blockchain. With a market capitalization of over $139 billion, USDT is the dominant stablecoin, serving as a bridge between traditional finance and the crypto economy. However, while Bitcoin is the largest cryptocurrency in terms of value and influence, it was not originally designed to support decentralized applications or fast transactions. This is where the Lightning Network comes in—a second-layer solution that enables instant and low-cost payments, thus facilitating USDT’s integration into the Bitcoin ecosystem. Elizabeth Stark, CEO of Lightning Labs, welcomed this development, emphasizing that this integration will allow millions of people to send dollars quickly and securely via the most open and robust blockchain.
Despite the uncertainty linked to trade tensions between the United States and its key partners, Bitcoin continues to follow patterns consistent with previous cycles. For the past 2.5 months, it has been fluctuating within a range of $90,000 to $109,000, mirroring the trajectory of its 2017 cycle. This relative stability persists despite heightened market volatility, fueled by the introduction of new U.S. tariffs against Canada, Mexico, and China. Since its low in November 2022, marked by the collapse of FTX, Bitcoin has surged by approximately 525%. This figure is comparable to the 533% increase it experienced at the same stage of the 2017 cycle. Another way to assess its progress is by analyzing its performance relative to its historical peaks. While its nominal peak was $69,000 in November 2021, many on-chain indicators suggest that the true peak of the previous cycle was reached in April 2021, at around $64,000.
Despite macroeconomic and geopolitical turmoil, Bitcoin continues to test the upper and lower limits of its trading channel, demonstrating a certain resilience to external events. This trend suggests that, although the market undergoes phases of uncertainty, Bitcoin’s cyclical structure remains consistent with previous bullish periods. Finally, recent research conducted by CoinDesk has identified the $91,000 level as a local floor for Bitcoin. As long as its price remains within this channel, it appears to be following a historical pattern similar to past cycles, which could reassure some investors about its medium- to long-term growth potential.
The presented information is as of January 28th, 2025, unless otherwise indicated and is provided for information purposes only. The information comes from sources that we believe are reliable, but not guaranteed. This statement does not provide financial, legal or tax advice. Rivemont Investments are not responsible for any errors or omissions in the information or for any loss or damage suffered.
