On Monday morning, the market did that factor it at all times does when politics stops being background noise and begins grabbing the steering wheel.
Screens went crimson, chats full of the identical half-jokes about “macro,” and Bitcoin slipped again beneath the psychological ranges merchants had simply spent the weekend defending. The headline danger had a well-known scent, tariffs, allies, a risk timed for max consideration, and simply sufficient ambiguity to maintain leverage on edge.
This time the spark got here from Greenland.
Over the weekend, President Donald Trump escalated his strain marketing campaign in opposition to European allies who oppose U.S. efforts to accumulate the territory, floating a 10% tariff that will start on February 1, with a risk to boost it additional later this 12 months.
By Monday, markets have been not treating it as an offhand comment. U.S. futures slid, European indices fell, and the story mutated from geopolitical theatre into an actual commerce shock that might spill throughout danger belongings.
For crypto merchants, the temper shift felt private. Loads of desks nonetheless bear in mind October, when tariff headlines helped set off one of many nastiest liquidation cascades of the cycle, the sort that empties out leverage and leaves even good positions wanting silly for 48 hours.
That reminiscence has been sitting quietly within the background, ready for the following excuse.
Then the excuse arrived, with a letter.
In Davos, BBC’s protection and wider reporting circulated that Trump despatched a word to Norway’s prime minister linking Greenland to the Nobel Peace Prize, suggesting that, as a result of he had not been awarded the prize, he may justify taking a tougher posture.
The textual content of the message additionally moved by diplomatic channels, in line with reporting attributed to a number of officers.
Pricey Jonas: Contemplating your Nation determined to not give me the Nobel Peace Prize for having stopped 8 Wars PLUS, I not really feel an obligation to assume purely of Peace, though it is going to at all times be predominant, however can now take into consideration what is nice and correct for the US of America. Denmark can’t defend that land from Russia or China, and why have they got a “proper of possession” anyway? There are not any written paperwork, it’s solely {that a} boat landed there a whole lot of years in the past, however we had boats touchdown there, additionally. I’ve carried out extra for NATO than another particular person since its founding, and now, NATO ought to do one thing for the US. The World will not be safe except we have now Full and Whole Management of Greenland. Thanks! President DJT.
It sounded ridiculous, but it landed with weight as a result of officers verified it was actual, and it gave markets one thing they hate: a story that may escalate with out warning.
That’s the half that issues.
The “tariff cycle” and the Greenland episode
Again in October, a submit from The Kobeissi Letter laid out what it known as an investor playbook for tariff episodes, a rinse-and-repeat sequence of cryptic threats, panic promoting, weekend rhetoric, a Sunday night time futures pop, and the gradual crawl towards a deal that lets markets breathe once more.
| Step | What occurs | What to look at for |
|---|---|---|
| 1 | Trump posts a cryptic tariff warning aimed toward a rustic or sector, markets drift decrease | Obscure language, no numbers but, danger belongings soften, crypto funding begins to chill |
| 2 | Trump declares a big tariff charge, markets dump onerous, weak positions get shaken out | A selected share, fast spike in volatility, liquidations improve |
| 3 | Dip consumers step in, a head-fake rally varieties, then recent lows seem, sensible cash begins shopping for | Bounce on low conviction, then a second leg down with higher bid assist |
| 4 | After Friday’s shut, Trump doubles down on tariffs to use strain | Weekend escalation, posts or statements timed after market hours |
| 5 | On Saturday, the tariff goal responds or feedback | Official rebuttals, retaliation discuss, counter-tariff hints |
| 6 | On Sunday, earlier than futures open, Trump posts that he’s engaged on an answer | “Engaged on it,” “productive talks,” “deal potential,” softening language |
| 7 | Futures open sharply greater Sunday night, then lose momentum into Monday’s open | Hole up at 6pm ET, fade into money open, uneven risk-on try |
| 8 | After Monday’s open, Treasury Secretary Bessent seems on reside TV and reassures buyers | Media hit from Treasury, tone and phrasing matter, reassurance vs justification |
| 9 | Over the following 2–4 weeks, administration officers tease a commerce deal | “Framework,” “constructive,” “ongoing talks,” leaks to pleasant retailers |
| 10 | Trump declares a brand new commerce deal, shares hit a file excessive | Photograph-op announcement, reduction rally, danger belongings re-rate greater |
| 11 | Cycle repeats from Step #1 | New goal, new sector, similar sequence of headlines and volatility |
The query as we speak is easy, the place are we in that loop now, and does the loop even maintain up?
When you strip out the social media bravado and have a look at the form of the week, Greenland matches the early a part of the Kobeissi framework virtually too cleanly.
Friday introduced the preliminary risk, Trump saying he might hike tariffs on international locations that refuse to “associate with” the Greenland push.
Over the weekend, the risk hardened into specifics, a ten% tariff starting February 1, aimed toward eight European international locations, with a path to a better charge later within the 12 months if there isn’t any deal.
The goal international locations pushed again, and the backlash grew to become a part of the commerce story, not a aspect word.
In London, Prime Minister Keir Starmer warned {that a} commerce struggle is in nobody’s curiosity, and defended Greenland’s proper, alongside Denmark, to find out its personal future. Throughout Europe, officers mentioned retaliation instruments and the way far they have been prepared to go if the tariffs moved from risk to coverage.
Then, on Monday, the diplomatic curveball was delivered: the Nobel letter, which widened the story from a tariff spat right into a query about intent and credibility.
On the similar time, the market tape refused to play together with the best a part of Kobeissi’s “playbook.”
The mannequin assumes that by Sunday night the White Home tends to dangle an answer, and futures leap, solely to fade into the Monday open. That pop is the strain launch valve.
We didn’t get that.
As a substitute, U.S. futures, and subsequently Bitcoin, sank into Monday on the tariff risk.
That’s why, for those who’re forcing this Greenland episode right into a numbered step, the cleanest reply is that we’re nonetheless sitting within the “goal responds” part, the a part of the cycle the place allies push again, officers posture, and markets commerce the uncertainty.
In different phrases, Step 5 vitality.
There’s a element that complicates it additional, Treasury Secretary Scott Bessent did seem on TV, which in Kobeissi’s sequence is the second the administration reassures buyers after the Monday open.
However the reporting round Bessent as we speak is extra about justification than reassurance, arguing that Europe is just too weak to ensure Greenland’s safety. That form of message extends the standoff, it doesn’t calm it.
So sure, the “Treasury on TV” second confirmed up, the calming perform didn’t.
What crypto merchants noticed, and why it mattered
Bitcoin doesn’t want a geopolitical purpose to be risky, it could possibly do this by itself, but it surely reacts badly when the world shifts into risk-off mode and leverage is leaning the mistaken means.
On Monday, Bitcoin slid to round $92,500 in early buying and selling because the tariff risk hit sentiment. The transfer was a pointy, quick drop that took a number of thousand {dollars} off the value in a brief window.
Whether or not you name it concern or positioning, what merchants have been actually responding to was the sensation that the scenario had no off-ramp but.
That’s the reason the October comparability retains coming again. In October 2025, tariff headlines round China helped set off a brutal unwind that merchants nonetheless reference because the second the market discovered, once more, how fragile leverage may be.
In the present day’s promoting is smaller in magnitude, and the market construction is totally different, however the emotional sample rhymes, merchants see a headline that may broaden, they bear in mind what liquidation seems to be like, and so they begin trimming danger earlier than another person forces them to.
Does the thesis maintain up
Kobeissi framed the tariff cycle as an “precise playbook.” Greenland is a stress check for that declare.
The thesis holds up as a technique to describe how fashionable markets digest Trump’s tariff drama, first the risk, then the panic, then the weekend amplification, then the scramble for a “answer” headline that lets positioning rebuild.
It breaks down when it pretends the de-escalation at all times arrives on time.
Greenland has not supplied that clear de-escalation beat but, primarily as a result of the subject material is a rustic’s sovereignty slightly than pure macroeconomics.
As a substitute, the narrative escalated right into a diplomatic letter that European leaders are taking significantly, and the administration’s messaging, together with through Bessent, has leaned onerous into justification.
That issues as a result of markets commerce the trail, not the punchline. A playbook constructed round a predictable Sunday-night reduction rally is determined by somebody selecting reduction.
Proper now, the strain is the purpose.
The label for this second, and the 2 triggers to look at
The cleanest label for Monday is easy.
Escalation with out the Sunday off ramp.
If the cycle goes to snap again into one thing acquainted, the off-ramp has to look after the very fact, as a result of the Sunday futures second has already come and gone, and it got here within the mistaken course. futures
From right here, two issues matter.
- A reputable de-escalation sign within the subsequent few days, one thing particular, not vibes, not “we’re fascinated by it,” an actual line about talks, delays, scope modifications, or situations that soften the February 1 path. Markets can reside with battle, they battle with open-ended timelines.
- The tape has to verify that the panic has peaked. That appears like a reversal that holds by the U.S. money session, with danger belongings stabilising as a substitute of whipsawing, and crypto cooling off with out one other pressured unwind. You don’t want a rally to know leverage is clearing, you want value motion that stops behaving like it’s one headline away from breaking.
If we do get the traditional “Sunday night time reduction” transfer, it is not going to be the one we simply missed, it is going to be the following one, the following weekend the place an answer headline arrives earlier than futures open and provides merchants permission to reprice the chance.
Till then, we’re within the part the place headlines do the injury, and the market spends the remainder of the day making an attempt to work out whether or not the injury is non permanent.
For anybody who lived by October’s liquidation shock, that call by no means feels summary. It appears like a finger hovering over the shut button, and a timeline which may change with one submit, one interview, or one letter that appears like parody and arrives as coverage. letter