Bitcoin ignored Trump’s latest 25% tariff threat, but the $19B liquidation ghost from October is quietly resetting in the shadows

Bitcoin briefly dipped following President Trump's Jan. 12 threat of a 25% tariff on countries trading with Iran but quickly recovered, unlike the market reaction to a similar threat in October 2025. The key difference lies in market structure and the credibility of the announcement. The January threat lacked formal documentation, executive orders, or clear enforcement mechanisms, especially as the Supreme Court reviews the legality of Trump's use of the International Emergency Economic Powers Act (IEEPA) for tariffs. In contrast, the October threat, targeting China with a 100% tariff, hit a market with record-high open interest and crowded long positions, leading to over $19 billion in forced liquidations.

The article outlines a framework for pricing policy noise based on Credibility, Immediacy, and Leverage Fragility. October scored high on all three, while January scored low on credibility and immediacy. Furthermore, the transmission channel for the Iran threat is less direct than the US-China trade war; any serious enforcement would primarily impact China, which is a major buyer of Iranian oil. The main macro risk remains indirect: if the threat sustains an oil price risk premium, higher inflation expectations could push up real yields, negatively impacting risk assets like crypto.

The lesson learned is that crypto is now immune to unenforced geopolitics. The market adapted by buying volatility (hedging) rather than selling spot, and institutional flows provided support. The $19B liquidation risk remains conditional; if future tariff threats gain credibility, immediacy, and hit a highly leveraged market structure again, a cascade could occur.

(Source：CryptoSlate)