Crypto Market Wobbles into August Amid Trump’s New Tariffs Triggering Risk-Off Sentiment
August 1, 2025 | Updated August 2, 2025
By Tanaya Macheel, CNBC
The cryptocurrency market experienced notable declines on Friday as President Donald Trump introduced a modified set of “reciprocal” tariffs on dozens of countries, stirring fresh concerns about global economic conditions. This development sparked a risk-off sentiment among investors, prompting a sell-off across major crypto assets and related stocks heading into August.
Crypto Prices Slide on Tariff News
Bitcoin (BTC) dropped 3% to $113,231.41, while ether (ETH) and Solana (SOL) tokens fell more sharply, declining 6% and 5%, respectively. The sell-off accelerated liquidation events, where traders are forced to sell assets at market prices to cover their debts. According to data from CoinGlass, Bitcoin underwent approximately $228 million in long liquidations across centralized exchanges within 24 hours, and ether liquidations totaled $262 million in the same period.
Crypto-Linked Stocks Suffer Sharp Losses
Stocks connected to the cryptocurrency ecosystem were hit even harder on the heels of the new tariffs combined with other market pressures. Coinbase led the declines with a 16% drop following its underwhelming second-quarter earnings report. Other firms with cryptocurrency exposure also slumped, including Circle (-8.4%), Galaxy Digital (-5.4%), and ether treasury manager Bitmine Immersion (-7.4%). Notably, MicroStrategy, a major bitcoin proxy stock, declined by 8.7%.
Economic Uncertainty Spurs Risk Aversion
The broader market moves reflect investors’ shifting mood amid concerns that the newly imposed tariffs—ranging between 10% and 41%—could exacerbate inflationary pressures. This in turn raises doubts about the Federal Reserve’s ability to proceed with interest rate cuts. In such environments characterized by heightened risk aversion, speculative and volatile assets such as cryptocurrencies typically see heightened selling pressure.
Ben Kurland, CEO of crypto research platform DYOR, characterized the current pullback as a “healthy strategic cooldown” after July’s robust gains. “Markets aren’t reacting to a crisis, they’re responding to the lack of one. With no new macro catalyst on the horizon, capital is rotating out of speculative assets and into safer ground…it’s a calculated pause,” Kurland explained.
July’s Gains Before the Slowdown
July had been a profitable month for cryptocurrencies, with Bitcoin appreciating 8% and Ether surging more than 49%, according to analytics firm Coin Metrics. Ether ETFs also enjoyed substantial inflows totaling more than $5 billion in July, with only a single day of minor outflows. Bitcoin ETFs saw about $6 billion of inflows during the month, despite a modest outflow on the last trading day.
Outlook
With August typically characterized by lower trading volumes and increased volatility, the crypto market appears poised for a cautious period. Institutional demand and technical support continue to underpin Bitcoin and Ether prices, but the recent tariff announcements and the resultant risk-off sentiment could pressure the market in the weeks ahead.
Investors will be watching developments in U.S. trade policy closely, along with broader macroeconomic indicators, for cues on how the cryptocurrency landscape might evolve as summer progresses.
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