The recent decline in Bitcoin's price is largely driven by economic uncertainties following President Trump's announcement of new tariffs. The imposition of a 25% levy on Canada and Mexico, effective February 1, and a 10% tariff on China has injected volatility into the cryptocurrency markets. This geopolitical tension has led to a broader market reaction, with the CoinDesk 20 Index also experiencing a downturn. Additionally, U.S. labor market data and inflation figures are adding to the pressure on Bitcoin, as persistent inflation indicated by the PCE price index may influence Federal Reserve policy decisions. Analysts are cautious, suggesting that Bitcoin could fall further if upcoming economic data remains unfavorable.
The ProShares Short Bitcoin Strategy ETF (BITI) has responded to these developments, rising 2.78% to $21.81 as of 3:00 PM on Friday, January 31.