Pressure mounts for cryptocurrencies due to Trump's trade policies and poor U.S. labor market statistics.
The United States has announced a new round of trade tariffs, effective from August 7, 2025, affecting goods from around 70 countries, including close U.S. trading partners [1][4]. The tariffs range from 10% to 41% and target a variety of products, with existing tariffs on Canada, Mexico, and China remaining separate.
These tariffs are part of an executive order aimed at addressing trade imbalances and ensuring reciprocal trade commitments. However, the immediate impact on the economy and financial markets has been significant, with experts warning that higher duties will increase production costs and burden international trade [2].
One area that has felt the indirect but notable effects of these tariffs is the crypto market. The tariffs have caused an estimated 1.8% rise in overall consumer prices in the short run, raising costs on a wide range of goods, particularly clothing and textiles, which face price hikes of up to 40% [2]. This consumer price inflation can reduce disposable income and increase economic uncertainty, factors that traditionally influence risk sentiment and asset allocation, including in cryptocurrency markets.
The new tariffs have led to a downturn in the crypto market. Bitcoin fell about 2.4% and last traded around $114,000. The total market capitalization of the crypto market fell to around $3.75 trillion, with cryptocurrencies experiencing significant losses within 24 hours, amounting to around $750 million in liquidation volume [3]. Other large coins like XRP, Solana, and Dogecoin also saw notable declines.
The development over the coming weeks will heavily depend on political signals and economic data. If the trade conflict escalates and consumer spending and business investments are held back, the situation could worsen. In July, only 73,000 new jobs were created in the U.S., far fewer than the 100,000 expected by analysts, and the unemployment rate rose to 4.2%. This weak jobs data is seen as a warning sign for a possible slowdown in the U.S. economy [5].
However, the current downturn could also be an opportunity for risk-conscious investors. New projects like Bitcoin Hyper (HYPER), a Layer-2 project that combines the security of Bitcoin with the speed of Solana technology, are coming into focus [6].
The announcement of new tariffs caused immediate turmoil in international exchanges, with the Stoxx 600 falling nearly 1.9% in Europe, and the Dow Jones, S&P 500, and Nasdaq all closing with losses between 1.2% and 2% [3]. The new tariffs increase the risk for corporate profits and global trade, further dampening risk appetite.
In conclusion, the new U.S. trade tariffs have created an economic environment characterized by higher costs and inflation concerns, which typically impact crypto market dynamics through investor sentiment and macroeconomic channels. While no direct or immediate causal link from these August 2025 tariffs to crypto market movements is documented yet, the tariffs broadly create a context that could influence crypto prices in the future.
- Investors, in search of opportunities in a turbulent market, may find interest in new projects such as Bitcoin Hyper (HYPER), which combines the security of Bitcoin with the speed of Solana technology.
- The new trade tariffs, by raising consumer prices and creating economic uncertainty, can potentially affect investor sentiment and asset allocation in technology-related sectors, including cryptocurrency markets.
