Bitcoin Drops Below $85,000 as ETFs See Record Capital Outflows

The cryptocurrency market took a sharp dive after Donald Trump announced a 25% tariff on imports from the European Union. In response, Bitcoin (BTC) tumbled below the $85,000 mark, while total liquidations neared $745 million.

Investor concerns over a potential bear market are growing, as BTC ETFs recorded their highest-ever capital outflows.

How Do Trump’s Tariffs Impact Bitcoin?

The recent volatility in the crypto market is largely tied to ongoing U.S. trade disputes. While the market had briefly rebounded following a delay in tariffs on Canada and Mexico, Trump’s new 25% tariff on EU imports triggered another wave of sell-offs.

“We have made our decision and will announce it very soon. The tariff will be 25%—primarily on cars and other goods,” Trump stated during his first Cabinet meeting.

This announcement intensified selling pressure on BTC, which was already struggling due to a $500 million ETF outflow. By the end of the week, BTC-ETF outflows had hit record levels, pushing Bitcoin’s price back to early November levels.

Crypto Stocks Take a Hit

According to CoinGlass, total liquidations reached $745 million in just 24 hours, following $1.5 billion in liquidations the previous day.

The ripple effect was felt across the crypto sector:

• Strategy (formerly MicroStrategy): One of the largest Bitcoin holders, the company had recently acquired $2 billion worth of BTC. However, fears of liquidation caused a sharp drop in its stock price.
• Coinbase: The exchange saw a brief decline due to Bitcoin’s plunge but managed to stabilize due to its diversified revenue streams.
• Tesla: As Bitcoin remains a key part of its assets, Tesla faced dual pressure—both from the crypto market crash and growing dissatisfaction from its customers.

Market Under Pressure: Is There a Reason to Panic?

While Trump’s tariffs may have been the tipping point, signs of market weakness were already emerging:

• Hacks & Scams: A rise in crypto platform breaches and fraudulent schemes on social media have eroded investor confidence.
• Technical Indicators: Many charts pointed to a market downturn, with BTC breaking key support levels, accelerating liquidations.
• ETF Outflows: A steady increase in withdrawals hinted at a possible trend reversal even before this recent drop.

Despite growing concerns, analysts suggest there’s no need for panic. The crypto market has always been highly volatile, with previous downturns followed by strong recoveries. The key question now is whether Trump’s tariffs will spark a prolonged bearish trend or simply a short-term shakeout.