On Monday morning, the market did that thing it always does when politics stops being background noise and starts grabbing the steering wheel.
Screens went red, chats filled with the same half-jokes about “macro,” and Bitcoin slipped back under the psychological levels traders had just spent the weekend defending. The headline risk had a familiar scent, tariffs, allies, a threat timed for maximum attention, and just enough ambiguity to keep leverage on edge.
This time the spark came from Greenland.
Over the weekend, President Donald Trump escalated his pressure campaign against European allies who oppose U.S. efforts to acquire the territory, floating a 10% tariff that would begin on February 1, with a threat to raise it further later this year.
By Monday, markets were no longer treating it as an offhand remark. U.S. futures slid, European indices fell, and the story mutated from geopolitical theatre into a real trade shock that could spill across risk assets.
For crypto traders, the mood shift felt personal. Plenty of desks still remember October, when tariff headlines helped trigger one of the nastiest liquidation cascades of the cycle, the kind that empties out leverage and leaves even good positions looking stupid for 48 hours.
That memory has been sitting quietly in the background, waiting for the next excuse.
Then the excuse arrived, with a letter.
In Davos, BBC’s coverage and wider reporting circulated that Trump sent a note to Norway’s prime minister linking Greenland to the Nobel Peace Prize, suggesting that, because he had not been awarded the prize, he could justify taking a harder posture.
The text of the message also moved through diplomatic channels, according to reporting attributed to multiple officials.
Dear Jonas: Considering your Country decided not to give me the Nobel Peace Prize for having stopped 8 Wars PLUS, I no longer feel an obligation to think purely of Peace, although it will always be predominant, but can now think about what is good and proper for the United States of America. Denmark cannot protect that land from Russia or China, and why do they have a “right of ownership” anyway? There are no written documents, it’s only that a boat landed there hundreds of years ago, but we had boats landing there, also. I have done more for NATO than any other person since its founding, and now, NATO should do something for the United States. The World is not secure unless we have Complete and Total Control of Greenland. Thank you! President DJT.
It sounded ridiculous, yet it landed with weight because officials verified it was real, and it gave markets something they hate: a narrative that can escalate without warning.
That is the part that matters.
The “tariff cycle” and the Greenland episode
Back in October, a post from The Kobeissi Letter laid out what it called an investor playbook for tariff episodes, a rinse-and-repeat sequence of cryptic threats, panic selling, weekend rhetoric, a Sunday night futures pop, and the slow crawl toward a deal that lets markets breathe again.
| Step | What happens | What to watch for |
|---|---|---|
| 1 | Trump posts a cryptic tariff warning aimed at a country or sector, markets drift lower | Vague language, no numbers yet, risk assets soften, crypto funding starts to cool |
| 2 | Trump announces a large tariff rate, markets sell off hard, weak positions get shaken out | A specific percentage, immediate spike in volatility, liquidations increase |
| 3 | Dip buyers step in, a head-fake rally forms, then fresh lows appear, smart money starts buying | Bounce on low conviction, then a second leg down with better bid support |
| 4 | After Friday’s close, Trump doubles down on tariffs to apply pressure | Weekend escalation, posts or statements timed after market hours |
| 5 | On Saturday, the tariff target responds or comments | Official rebuttals, retaliation talk, counter-tariff hints |
| 6 | On Sunday, before futures open, Trump posts that he is working on a solution | “Working on it,” “productive talks,” “deal possible,” softening language |
| 7 | Futures open sharply higher Sunday evening, then lose momentum into Monday’s open | Gap up at 6pm ET, fade into cash open, choppy risk-on attempt |
| 8 | After Monday’s open, Treasury Secretary Bessent appears on live TV and reassures investors | Media hit from Treasury, tone and phrasing matter, reassurance vs justification |
| 9 | Over the next 2–4 weeks, administration officials tease a trade deal | “Framework,” “constructive,” “ongoing talks,” leaks to friendly outlets |
| 10 | Trump announces a new trade deal, stocks hit a record high | Photo-op announcement, relief rally, risk assets re-rate higher |
| 11 | Cycle repeats from Step #1 | New target, new sector, same sequence of headlines and volatility |
The question today is simple, where are we in that loop now, and does the loop even hold up?
If you strip out the social media bravado and look at the shape of the week, Greenland fits the early part of the Kobeissi framework almost too cleanly.
Friday brought the initial threat, Trump saying he may hike tariffs on countries that refuse to “go along with” the Greenland push.
Over the weekend, the threat hardened into specifics, a 10% tariff beginning February 1, aimed at eight European countries, with a path to a higher rate later in the year if there is no deal.
The target countries pushed back, and the backlash became part of the trade story, not a side note.
In London, Prime Minister Keir Starmer warned that a trade war is in no one’s interest, and defended Greenland’s right, alongside Denmark, to determine its own future. Across Europe, officials discussed retaliation tools and how far they were willing to go if the tariffs moved from threat to policy.
Then, on Monday, the diplomatic curveball was delivered: the Nobel letter, which widened the story from a tariff spat into a question about intent and credibility.
At the same time, the market tape refused to play along with the neatest part of Kobeissi’s “playbook.”
The model assumes that by Sunday evening the White House tends to dangle a solution, and futures jump, only to fade into the Monday open. That pop is the pressure release valve.
We did not get that.
Instead, U.S. futures, and subsequently Bitcoin, sank into Monday on the tariff threat.
That’s why, if you’re forcing this Greenland episode into a numbered step, the cleanest answer is that we are still sitting in the “target responds” phase, the part of the cycle where allies push back, officials posture, and markets trade the uncertainty.
In other words, Step 5 energy.
There is a detail that complicates it further, Treasury Secretary Scott Bessent did appear on TV, which in Kobeissi’s sequence is the moment the administration reassures investors after the Monday open.
But the reporting around Bessent today is more about justification than reassurance, arguing that Europe is too weak to guarantee Greenland’s security. That kind of message extends the standoff, it does not calm it.
So yes, the “Treasury on TV” moment showed up, the calming function did not.
What crypto traders saw, and why it mattered
Bitcoin does not need a geopolitical reason to be volatile, it can do that on its own, but it reacts badly when the world shifts into risk-off mode and leverage is leaning the wrong way.
On Monday, Bitcoin slid to around $92,500 in early trading as the tariff threat hit sentiment. The move was a sharp, fast drop that took several thousand dollars off the price in a short window.
Whether you call it fear or positioning, what traders were really responding to was the feeling that the situation had no off-ramp yet.
That is why the October comparison keeps coming back. In October 2025, tariff headlines around China helped trigger a brutal unwind that traders still reference as the moment the market learned, again, how fragile leverage can be.
Today’s selling is smaller in magnitude, and the market structure is different, but the emotional pattern rhymes, traders see a headline that can expand, they remember what liquidation looks like, and they start trimming risk before someone else forces them to.
Does the thesis hold up
Kobeissi framed the tariff cycle as an “exact playbook.” Greenland is a stress test for that claim.
The thesis holds up as a way to describe how modern markets digest Trump’s tariff drama, first the threat, then the panic, then the weekend amplification, then the scramble for a “solution” headline that lets positioning rebuild.
It breaks down when it pretends the de-escalation always arrives on time.
Greenland has not offered that clean de-escalation beat yet, mainly because the subject matter is a country’s sovereignty rather than pure macroeconomics.
Instead, the narrative escalated into a diplomatic letter that European leaders are taking seriously, and the administration’s messaging, including via Bessent, has leaned hard into justification.
That matters because markets trade the path, not the punchline. A playbook built around a predictable Sunday-night relief rally depends on someone choosing relief.
Right now, the pressure is the point.
The label for this moment, and the two triggers to watch
The cleanest label for Monday is simple.
Escalation without the Sunday off ramp.
If the cycle is going to snap back into something familiar, the off-ramp has to appear after the fact, because the Sunday futures moment has already come and gone, and it came in the wrong direction. futures
From here, two things matter.
- A credible de-escalation signal in the next few days, something specific, not vibes, not “we’re thinking about it,” a real line about talks, delays, scope changes, or conditions that soften the February 1 path. Markets can live with conflict, they struggle with open-ended timelines.
- The tape has to confirm that the panic has peaked. That looks like a reversal that holds through the U.S. cash session, with risk assets stabilising instead of whipsawing, and crypto cooling off without another forced unwind. You do not need a rally to know leverage is clearing, you need price action that stops behaving like it is one headline away from breaking.
If we do get the classic “Sunday night relief” move, it will not be the one we just missed, it will be the next one, the next weekend where a solution headline arrives before futures open and gives traders permission to reprice the risk.
Until then, we are in the phase where headlines do the damage, and the market spends the rest of the day trying to work out whether the damage is temporary.
For anyone who lived through October’s liquidation shock, that decision never feels abstract. It feels like a finger hovering over the close button, and a timeline that might change with one post, one interview, or one letter that sounds like parody and arrives as policy. letter
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