Bitcoin Ignores Trump's 25% Tariff Threat as $19B Liquidation Risk Looms

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Bitcoin prices have shown little reaction to U.S. President Donald Trump's latest 25% tariff announcement on countries conducting business with Iran. The move, described as "final and conclusive" by the president, has not triggered significant volatility in the cryptocurrency market. Bitcoin has traded within a $80,000 to $95,000 range since November 2025, suggesting a stabilizing trend despite macroeconomic uncertainties according to Nikkei Asia.

Options open interest in Bitcoin has surpassed futures contracts, indicating a shift toward hedging and volatility strategies. As of January 2026, aggregate Bitcoin options open interest stands at $65 billion, eclipsing the $60 billion in futures notional value. This trend reflects institutional preference for options, which allow for more nuanced risk management compared to leveraged futures as reported by Yahoo Finance.

BlackRock's iShares Bitcoin Trust ETF (IBIT) now dominates the options market, accounting for 52% of total notional value. Since its launch in November 2024, IBIT has drawn strong institutional demand, prompting Deribit, a major derivatives exchange, to lose market share. Deribit now holds about 39% of the market, down from over 90% five years ago according to Yahoo Finance.

Why Did Bitcoin Remain Unshaken?

Bitcoin's muted response to Trump's tariff announcement contrasts with the sharp selloff in October 2025, when the cryptocurrency lost 35% of its value. At that time, options open interest peaked at $120 billion before expiries reduced it significantly. The current market structure, with a stronger emphasis on options and reduced leverage, has provided a buffer against rapid swings according to Yahoo Finance.

Trump's tariff on Iran business partners is part of a broader economic strategy that has included sector-specific levies on imports from China and others. However, the legal foundation of these tariffs, particularly those under the International Emergency Economic Powers Act (IEEPA), is under review by the U.S. Supreme Court. A ruling on the legality of IEEPA-based tariffs is expected as early as January 14.

What Are Analysts Watching Next?

Market participants are closely monitoring the Supreme Court's potential decision on the IEEPA tariffs. If the court rules the tariffs unconstitutional, the Trump administration may have to pivot to alternative legal frameworks, such as Section 232 or 301 of the Trade Expansion Act, to justify new tariffs. However, these pathways require more extensive investigations and process, which could delay further policy changes as Bloomberg Law reports.

The impact of Trump's tariff regime on global trade flows is also under scrutiny. China, India, and the UAE are among the largest trading partners with Iran and could face immediate consequences if the 25% tariff is enforced. The administration's approach to balancing economic policy with diplomatic objectives remains a key focus according to Nikkei Asia.

What Could Trigger the Next Market Move?

Bitcoin options open interest, while currently stable, could face renewed pressure if broader market conditions shift. Analysts note that a drop in open interest can signal liquidity withdrawal and bearish sentiment. In October 2025, a sharp decline in options open interest coincided with a 35% drop in Bitcoin's price. If similar conditions arise, the $19 billion liquidation risk—stemming from expiring contracts—could reemerge according to FXStreet.

Investors are also watching the broader implications of Trump's economic agenda. If the Supreme Court upholds the IEEPA tariffs, it could embolden the administration to impose more levies, potentially affecting global supply chains and capital flows. Conversely, a ruling against the tariffs could introduce uncertainty into the market, forcing companies to reevaluate long-term planning as Barron's reports.

As Bitcoin traders navigate these dynamics, the interplay between macroeconomic policy, regulatory clarity, and market structure will likely shape the trajectory of the cryptocurrency in the coming months.