The recent decline in Bitcoin's price is largely driven by economic uncertainty following President Trump's announcement of new tariffs. The tariffs, set to take effect on February 1, impose a 25% levy on Canada and Mexico and a 10% tariff on China, creating volatility in the cryptocurrency markets. This has led to a broader decline in the CoinDesk 20 Index, with Bitcoin slipping from its earlier highs. Additionally, U.S. labor market data and inflation figures are adding to the pressure, as the recent PCE price index report indicates persistent inflation, potentially influencing Federal Reserve policy decisions. Analysts warn that Bitcoin could fall further if upcoming economic data does not support the cryptocurrency.
The ProShares Bitcoin Strategy ETF (BITO) has mirrored Bitcoin's downturn, falling 2.75% to $24.76 as of 3:00 PM on Friday, January 31.