Bitcoin extended losses on Tuesday as investor sentiment soured amid mounting uncertainty over U.S. trade policy and a controversial tax and spending bill backed by President Donald Trump. The broader crypto market remained muted, underperforming relative to equities despite recent corporate buy-in.
As of 09:11 ET (13:11 GMT), Bitcoin was down 0.8% to $106,670, marking its second consecutive session of declines.
Profit-Taking, Fiscal Jitters Add Pressure
Bitcoin’s decline followed a sharp rally through June, during which it significantly outperformed the rest of the digital asset space. The recent weakness appears driven by profit-taking, alongside concerns about macroeconomic headwinds and geopolitical risks.
This downturn came despite further accumulation by major corporate holders.
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Strategy (formerly MicroStrategy, NASDAQ:MSTR) purchased over $500 million in BTC.
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Japan’s Metaplanet Inc (TYO:3350) added another $108 million worth of Bitcoin.
Yet, these acquisitions failed to stem the bearish momentum, highlighting how market-wide risk aversion is now overshadowing bullish institutional flows.
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Trade Policy in Focus: Countdown to July 9
Global financial markets are increasingly focused on the fast-approaching July 9 deadline for countries to strike trade deals with the U.S. President Trump has indicated no extension will be granted, warning that tariffs ranging from 20% to 50% could be imposed on non-compliant nations.
While Canada has resumed negotiations after withdrawing its digital services tax, tensions with Japan have escalated. Trump accused Tokyo of failing to import U.S. rice and suggested a potential breakdown in trade talks with Japan.
Uncertainty around trade terms and supply chain disruptions has historically weighed on risk-sensitive assets, including cryptocurrencies.
Fiscal Risks Mount with Trump’s “Big Beautiful Bill”
Adding to the market stress, U.S. lawmakers are engaged in heated debate over a sweeping tax and spending reduction bill. Early estimates suggest the proposed legislation could add $3.3 trillion to the federal debt over the next decade, at a time when U.S. debt has already breached $36 trillion.
Rising debt levels and uncertain fiscal direction have previously had mixed effects on Bitcoin — viewed by some investors as a hedge against monetary instability, while others remain cautious during periods of rising real yields.
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Conclusion:
Bitcoin’s latest dip reflects a shift in investor psychology, driven by global trade tensions, fiscal risks, and profit-booking after a strong June rally. While corporate adoption remains a long-term tailwind, near-term volatility may persist as traders await clarity on the July 9 trade deadline and U.S. policy developments.
