Bitcoin Pulls Back After Trump Designates Venezuela’s Government as a Terrorist Organization

The president issued a blockade of all sanctioned Venezuelan oil tankers, sending oil prices up, while bitcoin and stocks fell.

Bitcoin Retreats After U.S. Action Against Venezuelan Regime

On Sept. 2, 2025, U.S. forces struck an alleged Venezuelan drug boat, killing nine of its occupants. Somehow, two men survived the initial phase of the attack, but as they clung to the boat’s remains for dear life, a follow-up “double tap” strike finished them off, bringing the death toll to eleven. The incident is only one of at least 26 U.S. military operations that have killed roughly 95 Venezuelans suspected of smuggling drugs into the United States.

(Radar imagery of a suspected drug runner boat in the Caribbean Sea. / Wikimedia Commons) “For the theft of our Assets, and many other reasons, including Terrorism, Drug Smuggling, and Human Trafficking, the Venezuelan Regime has been designated a FOREIGN TERRORIST ORGANIZATION,” said U.S. President Donald Trump on Tuesday.

The president has accused the South American nation of emptying its prisons and sending the worst of its citizenry to terrorize Americans. He called Venezuela’s notorious dictator Nicolás Maduro Moros “illegitimate” and demanded that Maduro return “Oil, Land, and other Assets” stolen from America. There is some truth to Trump’s claims. Venezuelan gangs such as the infamous Tren de Aragua have contributed to America’s fentanyl crisis, and ever since Maduro seized power in 2013, more than eight million Venezuelans have fled the country.

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And now, it appears tensions between the U.S. and Venezuela have reached a boiling point. Trump has dispatched warships to the Caribbean, with the world’s largest aircraft carrier, the USS Gerald R. Ford, now less than 300 miles from Venezuela’s coastline. Just last week, the U.S. seized a Venezuelan vessel, and the president has now issued a blockade of all sanctioned Venezuelan oil tankers. Crude prices jumped 2.4% on Wednesday, as fears of a supply shock spread. Stocks were in the red, and bitcoin fell by roughly 2%.

Joshua Young, chief investment officer at commodities investment firm Bison Interests, sounded the alarm on the potential economic effects of Trump’s aggressive actions during a CNBC interview. “I do think that if we do impose the blockade that Trump posted about, it could have a pretty meaningful impact on oil prices,” Young said. “Well beyond the two or three dollars that another expert had cited.”

Overview of Market Metrics

Bitcoin was trading at $85,956.58 at the time of writing, down 2% for the day and 8.35% for the week, according to Coinmarketcap. The digital asset’s price reached a 24-hour low of $85,316.27 and a high of $90,264.57.

( BTC price / Trading View) Daily trading volume was mostly flat, easing to $43.66 billion, a 2.33% decline. Market capitalization fell to $1.71 trillion, and bitcoin dominance rose by 0.43% to 59.66%, indicating better market resilience than competing alts.

( BTC dominance / Trading View) Total bitcoin futures open interest dropped 2.91% to $57.02 billion, Coinglass data shows. Liquidations jumped over the past 24 hours, reaching $155.08 million at the time of reporting. Losses were more or less evenly split between longs and shorts, with the former seeing $74.94 million in liquidations and the latter accumulating $80.13 million in losses.

FAQ ⚡

• Why did bitcoin fall after Trump’s Venezuela announcement?

Escalating tensions between the U.S. and Venezuela pushed investors into risk-off mode, dragging bitcoin and stocks lower.

• What action did Trump take against Venezuela?

Trump designated Venezuela’s government a terrorist organization and ordered a blockade of sanctioned oil tankers.

• How did markets react to the blockade?

Oil prices jumped on supply fears, while equities fell and bitcoin slid roughly 2%.

• Could higher oil prices affect bitcoin going forward?

Rising energy prices can tighten financial conditions, which often weigh on risk assets like bitcoin.