Davos, Switzerland — Bitcoin surged back above the $90,000 threshold on Wednesday after President Donald Trump used his keynote address at the World Economic Forum (WEF) to de-escalate a looming transatlantic trade war and reaffirm his commitment to signing comprehensive cryptocurrency legislation "very soon."
The rally was ignited by Trump's surprise announcement that he had reached a "framework of a future deal" with NATO regarding the strategic status of Greenland, a move that prompted him to suspend punitive tariffs on eight European nations that had been set to take effect on February 1.The "risk-on" shift in global markets was immediate, with Bitcoin erasing days of losses to trade near $91,000, triggering over $1 billion in short liquidations across the crypto market.
The "Golden Dome" Deal
The standoff began earlier this month when the Trump administration threatened 10% tariffs on key European allies—including Denmark, Germany, and the UK—unless they acquiesced to U.S. demands regarding Greenland. Trump has long viewed the island as a critical component of his proposed "Golden Dome" missile defense architecture, designed to intercept hypersonic threats from Russia and China.
Speaking in Davos after a bilateral meeting with NATO Secretary General Mark Rutte, Trump revealed the contours of a compromise. "We have formed the framework of a future deal with respect to Greenland and, in fact, the entire Arctic Region," Trump wrote on Truth Social. "This solution, if consummated, will be a great one for the United States of America, and all NATO Nations".
While details remain sparse, diplomatic sources suggest the agreement avoids a direct transfer of sovereignty—a red line for Denmark and Greenland—while granting the U.S. expanded military rights. This likely includes new sites for missile interceptors and radar systems under the "Golden Dome" initiative, as well as privileged access to critical mineral deposits needed for the U.S. defense supply chain.
Trump Promises Crypto Legislation
Beyond the geopolitical relief, Bitcoin's rally was fueled by specific comments Trump made regarding the digital asset industry during his WEF address. In a direct nod to the crypto sector, Trump told the global audience that his administration is finalizing regulatory clarity for the market.
"Congress is working very hard on crypto market structure, legislation, bitcoin, all of them, which I hope to sign very soon, unlocking new pathways for Americans to reach financial freedom," Trump said.
This statement provided a secondary tailwind for the market, reassuring investors that the administration's pro-crypto stance remains a priority despite the recent focus on Arctic security. The comments helped decouple Bitcoin from the broader "Sell America" trade that had dragged it down earlier in the week.
Markets Exhale
The removal of the tariff threat sparked a broad recovery in risk assets. The S&P 500 rallied 1.2%, while gold—which had hit record highs as a safe haven during the peak of the tensions—pulled back.
For the crypto market, the volatility was extreme. Bitcoin had dropped to an intraday low of approximately $87,300 on Tuesday as fears of a trade war spooked institutional investors, leading to nearly $500 million in outflows from Spot Bitcoin ETFs. However, the reversal in Davos forced a massive "short squeeze," as traders betting on a further breakdown were forced to buy back coins to cover their positions.
European Caution
While markets celebrated, European leaders remained cautious. European Commission President Ursula von der Leyen, who had threatened to deploy the EU's "trade bazooka" in retaliation against U.S. tariffs, welcomed the de-escalation but warned that the framework still needs to be finalized.
Greenland's government also maintained a guarded stance. Prime Minister Jens-Frederik Nielsen, who has vehemently opposed any sale of the island, reiterated that while Greenland is open to security cooperation within NATO, its sovereignty is not up for negotiation.
As the dust settles in Davos, the focus now shifts to the specifics of the "Golden Dome" expansion and the text of the promised crypto legislation, both of which are poised to shape the investment landscape for the remainder of 2026.
