The cryptocurrency market experienced an initial dip following President Donald Trump's speech at the World Economic Forum in Davos but later showed modest gains after he appeared to back away from tariff threats related to Greenland. Traders revived the acronym TACO, standing for 'Trump Always Chickens Out,' reflecting skepticism about his aggressive rhetoric. Bitcoin rose to $90,232, while Ethereum increased by over 1.3% to $3,036 in the last 24 hours.
President Donald Trump addressed the World Economic Forum in Davos on January 21, 2026, reiterating his insistence that the United States must acquire Greenland for national security reasons. He emphasized reliance on diplomatic channels and explicitly ruled out military action, stating he 'won't use force.' Trump also indicated no plans to impose tariffs on regional countries as previously threatened for February 1, a move that eased market tensions.
In a subsequent post on Truth Social, Trump noted: 'Additional discussions are being held concerning The Golden Dome as it pertains to Greenland. Further information will be made available as discussions progress.' This apparent pause on tariff threats against eight European nations over Greenland contributed to a modest recovery in crypto prices, reviving the trader shorthand TACO—'Trump Always Chickens Out'—which suggests his tough talk often serves as negotiation leverage rather than firm policy.
Initially, the speech triggered a market downturn, with the Crypto Fear and Greed Index dropping to 32 in the fear zone from a monthly high of 60. The stalled CLARITY Act in the Senate, aimed at providing regulatory clarity for cryptocurrencies, saw diminished prospects on prediction markets like Polymarket. Liquidations surged 17% in the past 24 hours, totaling $345 million for Bitcoin bullish positions and $277 million for Ethereum, alongside increases for assets like XRP, HYPE, and DOGE.
Trump also reaffirmed his ambition to position the US as the global crypto capital through pro-industry policies, including the GENIUS Act for stablecoins. Broader concerns about weakening foreign demand for US Treasuries, exemplified by Swedish pension fund Alecta reducing its holdings due to US political unpredictability, have historically bolstered Bitcoin's appeal as a hedge against sovereign risks, potentially supporting digital assets amid rising yields.
