Crypto stocks dump as Treasury Secretary warns of April 2 tariffs

Treasury Secretary's Warning at Davos

U.S. Treasury Secretary Scott Bessent has cautioned European countries against enacting retaliatory measures concerning U.S. trade tariffs, particularly in the context of the Greenland crisis. Speaking at the World Economic Forum in Davos, Switzerland, on January 20, Bessent referenced the tariff war initiated by President Donald Trump. On April 2, 2025, Trump announced "reciprocal" tariffs on various countries worldwide.

President Trump, in his plans to acquire Greenland, has threatened to impose a 10% tariff on imports from Denmark, Norway, Sweden, France, Germany, the United Kingdom, the Netherlands, and Finland, effective February 1. This tariff is slated to increase to 25% beginning June 1. As European nations consider their responses, Bessent remarked that the current situation mirrors the "hysteria" and "panic" observed on April 2.

Bessent noted that only China escalated the tariff war with the U.S. the previous year, leading to an extended period of reciprocal actions. However, he claimed that Trump's relationship with Chinese President Xi Jinping subsequently stabilized that particular trade dynamic. Regarding the additional tariffs related to the Greenland crisis, Bessent asserted they are distinct from other trade agreements and urged all countries to adhere to their existing trade deals.

Bessent advised all parties to "sit back, take a deep breath, and let things play out." He emphasized his earlier statement from April 2: "the worst thing countries can do is escalate against the United States."

Impact of Tariffs on Crypto Stocks

The tariff war initiated by President Trump significantly impacted global stock markets, and crypto equities were not exempt from these fluctuations. While technology stocks have shown resilience and managed to recover from the shocks of the tariffs, crypto-linked stocks have faced greater challenges in staging a comeback.

For instance, major tech stocks such as Nvidia (Nasdaq: NVDA) and Tesla (Nasdaq: TSLA) are trading at price points close to where they were three months ago, despite experiencing market volatility. In contrast, crypto-related stocks have seen a more substantial decline. Michael Saylor's MicroStrategy (Nasdaq: MSTR), a prominent company holding Bitcoin on its treasury, has fallen approximately 40% over the past three months.

Similarly, Circle Internet Group (NYSE: CRCL), the stablecoin issuer that had a successful IPO in June of the previous year, has also experienced a decline of roughly 40% in its stock value over the same three-month period.

Pre-Market Performance of Crypto Stocks

On January 20, following the Martin Luther King Jr. Day holiday on January 19, the stock market opened with leading crypto stocks experiencing declines in pre-market trading.

MicroStrategy (MSTR) stock was trading at $164.85 in pre-market, marking a 5% decrease for the day. Circle Internet Group (CRCL) stock was down 4.5%, trading at $75.17.

Bitmine Immersion Technologies (NYSE: BMNR), a significant Ethereum treasury company, saw its stock fall by more than 7%, trading at $28.95 in pre-market. Coinbase (Nasdaq: COIN), the largest cryptocurrency exchange in the U.S., experienced a decline of over 4%, trading at $230.85.

Robinhood Markets (Nasdaq: HOOD), an e-trading platform offering crypto assets and tokenized stocks, was down 4% and trading at $104.40. Gemini (Nasdaq: GEMI), the crypto exchange founded by the Winklevoss twins, was down 4.5% and exchanging hands at $10.44 in pre-market. Galaxy Digital (Nasdaq: GLXY), a crypto asset manager, sank more than 7%, trading at $31.80 in pre-market.