Crypto Takes a Hit as Trump’s Tariffs Rattle Markets and Spark Investor Pullback
The cryptocurrency market stumbled into August after former President Donald Trump introduced a revised set of “reciprocal” tariffs targeting dozens of countries. The announcement fueled a wave of investor caution and led to a sell-off in digital assets.
Bitcoin dropped by 3% to around $113,231, while Ethereum and Solana slid by 6% and 5% respectively. The sharp declines triggered a cascade of long-position liquidations, where leveraged traders were forced to sell at market prices to cover losses. In the past 24 hours, bitcoin saw $228 million in liquidations, while Ethereum faced $262 million, according to CoinGlass.
Crypto-related stocks also suffered steep losses. Coinbase plunged 16% following a disappointing Q2 earnings report. Circle declined 8.4%, Galaxy Digital dropped 5.4%, and Bitmine Immersion, which holds substantial ether reserves, fell 7.4%. Bitcoin-focused MicroStrategy slipped 8.7%.
The pullback reflects a broader shift toward risk aversion following the announcement of new tariffs ranging from 10% to 41%, raising concerns about rising inflation and its impact on future interest rate decisions by the Federal Reserve. Historically, cryptocurrencies are among the first assets hit during periods of market de-risking due to their speculative nature.
Despite the downturn, some analysts see this as a normal market breather. Ben Kurland, CEO of blockchain research firm DYOR, said, “Markets aren’t panicking — they’re adjusting. With no major macro catalysts in play, capital is simply rotating out of high-risk assets.”
The crypto sector had a strong July, with bitcoin up 8% and ether soaring over 49%, according to Coin Metrics. Ether-based ETFs attracted over $5 billion in net inflows during the month — despite one day of outflows on July 2 — bringing total inflows to $9.64 billion. Meanwhile, bitcoin ETFs ended July with $114 million in net outflows, yet still recorded a healthy $6 billion in monthly gains, part of a $55 billion cumulative total.
Now, with trading volume typically lower in August and macro uncertainty looming, crypto markets may be entering a phase of heightened volatility.
