Tariff boots drop, and the crypto market has been hammered.

These days, Trump announced tariffs on eight European countries, causing Bitcoin to plummet. Honestly, this drop was quite eye-catching—the single-day decline expanded to 3.6%, and Bitcoin directly broke through the $92,000 mark, wiping out about $100 billion in total market capitalization of the entire crypto market in one go. Many people haven't even reacted yet, and the market was already turning sour.

There are three main drivers behind this decline:

The first is direct market pressure. Everyone is fleeing, where to? Turning to traditional safe-haven assets like gold and silver. Gold prices even hit a record high. In simple terms, wealthy and cautious investors are switching—moving from the crypto market to safer assets.

The second is a shift in expectations. The trade war means inflation pressures could further increase, and high interest rates might persist longer. This is not good news for crypto assets because a high-interest-rate environment itself depresses the valuation of risk assets.

The third is shaken confidence. Previously, many people regarded Bitcoin as "digital gold," believing it could compete with gold for safe-haven status. Now, it’s clear that in real safe-haven moments, investors still trust gold more. This is a blow to the narrative of the crypto market.

What’s the short-term outlook? The key is whether the tariffs will really be implemented on February 1. In the long run, cryptocurrencies need to prove their safe-haven value through more tests. It’s still uncertain whether we are at the bottom or if the decline will continue.