Cryptocurrency markets are feeling the heat as global tensions rise and investors brace for fresh U.S. inflation data. A wave of selling hit early Friday after former President Donald Trump threatened new tariffs on Canada and the European Union, rattling investor confidence across both traditional and digital markets.

Dogecoin (DOGE), Ethereum (ETH), and XRP all slid more than 5% in early Asian trading, as traders exited positions from this week’s brief rally. Dogecoin led the decline with a 7% loss, while the broader CoinDesk 20 Index fell 4.5%. In contrast, Toncoin (TON) stood out as the lone top-20 token in the green, gaining 5% over the same period.

Gold continued its breakout run, rising past $3,109 as traders rushed to safety. Meanwhile, global equities remained under pressure, with the MSCI World Index logging a multi-day losing streak and Asian markets on track for their worst session since February.

Crypto volatility could be further fueled by the imminent expiration of over $12.2 billion in Bitcoin options, with the “max pain” point pegged at $85,000—meaning many traders could face losses depending on price swings after expiry.

“Spot markets are flat and open interest keeps dropping, showing little short-term enthusiasm,” said analysts at QCP Capital in a Telegram update. “Until we see the PCE inflation data and get more clarity from Trump’s trade stance, upside remains limited.”

The U.S. Personal Consumption Expenditures (PCE) index, due out Friday, could shape the Federal Reserve’s next move. A hotter-than-expected reading may reignite concerns over rate hikes, which tend to dampen demand for speculative assets like bitcoin. Conversely, a cooler print could boost hopes for rate cuts, sparking renewed interest in crypto.

Canada, meanwhile, wasted no time in responding to Trump’s trade threat. Prime Minister Mark Carney said the U.S. can no longer be viewed as a reliable partner and announced plans to fast-track trade diversification efforts.

“Bitcoin’s role as an inflation hedge is under review,” said Innokenty Isers, CEO of Paybis. “With geopolitical tensions rising and monetary uncertainty in play, risk-averse investors might look elsewhere—especially if they expect prolonged market instability.”