Bitcoin plummeted to $113,164 on Friday, losing nearly 8% within hours and triggering over $200 million in liquidations. The downturn coincides with former President Donald Trump’s aggressive political maneuvering and amid rising geopolitical tensions between the U.S. and Russia. The market’s dramatic downturn reflects growing investor anxiety as Trump reenters the political landscape with incendiary foreign policy statements and attacks on U.S. economic institutions. Trump Orders Sub Repositioning Amid Russia Standoff Trump’s latest posts on Truth Social revealed a major military action: he ordered two nuclear submarines to reposition amid threats from Dmitry Medvedev, deputy chairman of Russia’s Security Council. Medvedev had dismissed Trump’s demand to stop the war in Ukraine within ten days as a “step towards war.” Trump responded, stating that there were now “unintended consequences” with military assets being moved. Markets quickly reacted to the escalation, with Bitcoin leading the retreat. Risk assets faltered as the prospect of renewed nuclear tension rattled global investors. Trump Blasts Fed and Jobs Figures Ahead of Election In a separate series of posts, Trump accused Labor Commissioner Erika McEntarfer of fudging job numbers to boost Vice President Kamala Harris’s chances in the 2024 election. He demanded that she be fired and referred to the numbers as “fake.”. Trump also criticized Fed Chairman Jerome Powell, calling him “a stubborn MORON” and demanding now rate cuts. He urged the Federal Reserve Board to work around Powell’s control, an unprecedented suggestion that breaks with decades of central bank independence. Fed Governor Adriana Kugler Resigns, Opening Trump Path Amidst growing political pressure, Federal Reserve Governor Adriana Kugler resigned Friday. Though she gave no definite reason, Kugler’s early departure leaves a key vacancy at the central bank—one Trump would be in a position to fill. Kugler, a Biden appointee and vocal supporter of rate stability, had sat out this week’s policy vote. Her resignation adds to the uncertainty at a time when institutional credibility is under assault from the top offices. Bitcoin in the Crosshairs of Political and Market Uncertainty Bitcoin’s steep drop reflects the market’s flight from risk amid global uncertainty. It now trades 7% beneath its all-time high of $123,182, which was reached a few weeks ago. Analysts point to tightening futures premiums and decreased leveraged activity as signs of momentum that is fading. Against expectations that Bitcoin would serve as a haven during political conflict, the asset has instead followed tech stocks, contradicting the safe-haven narrative. Investors are now shifting to short-term bonds and cash positions. Gold has also held firm at around $3,350, but even it has not been able to offer much comfort. Dalio Reassesses Bitcoin Amid U.S. Debt Fears Amidst the turmoil, some long-term investors are giving Bitcoin’s prospects a second thought. Ray Dalio, founder of Bridgewater Associates, now recommends allocating as much as 15% of portfolios to Bitcoin or gold as a hedge against inflation and debt. “The U.S. is beginning a debt doom loop,” Dalio warned, referring to a $12 trillion Treasury forecast. While cautious about Bitcoin’s volatility, he acknowledged its evolving character as a store-of-value asset. Conclusion Bitcoin’s fall below $115,000 is more than a matter of price volatility—it is an indicator of a broader investor flight driven by political uncertainty and economic doubt. As Trump reshapes the narrative on nuclear policy and economic rectitude, Bitcoin’s future trajectory will be determined not just by charts but by politics.
