NEW YORK, Jan 21, 2026, 06:36 EST — Premarket
Bitcoin, the world’s largest cryptocurrency, fell 2.2% to $89,221 on Wednesday, slipping back below $90,000 in early New York hours. It traded between $87,897 and $91,258, while ether slid 4.5% to $2,965.
The move followed a jump in cross-asset volatility after U.S. President Donald Trump threatened to rekindle a trade war with Europe. The Cboe Volatility Index, an options-based measure of expected S&P 500 swings, hit an eight-week high, and Jim Carroll at Ballast Rock Private Wealth called it “a very significant shift” in risk metrics. 1
On Tuesday, Wall Street logged its biggest one-day drop in three months as investors digested Trump’s tariff threats, including measures tied to his push for the U.S. to buy Greenland. Gold hit fresh record highs, while bitcoin fell more than 3% despite its reputation among some investors as a hedge when traditional markets wobble. 2
Corporate buying has not been enough to steady sentiment. Strategy, the bitcoin-heavy firm run by Michael Saylor, said it bought about $2.13 billion worth of bitcoin between Jan. 12 and Jan. 19, adding roughly 22,305 coins, according to a regulatory filing. Analyst Nic Puckrin, co-founder of Coin Bureau, said stopping purchases “would be as much a signal to the market” as buying more. 3
At Davos, SkyBridge Capital founder Anthony Scaramucci said policy uncertainty under Trump was feeding volatility and that “macro” traders — those betting on rates and currencies — had done better. He called bitcoin’s pullback from its October record above $126,000 “more of a timing issue than a direction issue” and said he would like to see it back in a $125,000-$150,000 range. Scaramucci said the crypto community got “overly enthusiastic” about quick U.S. rule changes, noting stablecoin legislation passed in July while the Clarity Act remains under consideration in the Senate. 4
Traders are watching whether tariff rhetoric cools and whether equity markets stabilize after Tuesday’s rout. The focus is also on U.S. inflation and growth data and the Federal Reserve’s next policy signals, which have been driving day-to-day risk appetite.
But bitcoin has stayed sensitive to the same risk-off swings that hit stocks, and sharp moves can snowball when investors rush to cut exposure. A fresh policy surprise out of Washington — or a hawkish tilt from central banks — would test the view that crypto can hold up when stress rises.
The next test comes on Thursday with the U.S. Personal Consumption Expenditures price index, the Fed’s preferred inflation gauge, followed by the Jan. 27-28 Federal Open Market Committee meeting. 5
