Potential Factors Likely to Impact Crypto Markets in the Imminent Week
In a significant turn of events, President Trump's announcement of reciprocal tariffs in early August 2025 has caused a ripple effect across the global economy, particularly in the cryptocurrency markets and stock markets.
Bill Adams, Comerica Bank's chief economist, stated that the weak July jobs report increases pressure on the Fed to cut rates later this year, a move that could potentially alleviate some of the economic uncertainty caused by the tariffs.
The tariffs, ranging from 10% minimum to as high as 41% on imports from multiple countries, triggered notable volatility and declines in cryptocurrency markets. Bitcoin and ether, in particular, faced hundreds of millions of dollars in liquidations within a day following the tariff announcements [1][2][5].
The tariff move heightened worries about inflation pressures and reduced investor confidence, causing a generalized market derisking that particularly hit speculative assets like cryptocurrencies. However, there remained some technical strength and institutional demand supporting bitcoin and ether prices despite the dips [1].
The tariffs also rattled global stock markets, especially in the US, EU, and Asia, exacerbating volatility and complicating international trade negotiations. The EU threatened countermeasures, and stock indices in the US, Japan, and Hong Kong experienced significant swings over the previous six months leading into August [4][5].
Despite initial sharp selloffs, crypto markets showed signs of recovery by early August, reflecting the asset class’s volatility and quick adaptation to policy shocks. Long-term investors viewed tariff-induced dips as potential accumulation opportunities [2].
As August progresses, Bitcoin is down 6.7% from its all-time highs, with August historically being a bearish month for the asset. Ethereum, on the other hand, was in danger of a bigger breakdown but appears to have held on to return to its range-bound channel.
In other news, reports for Palantir and AMD are due this week, and more than half of S&P 500 companies have reported strong earnings from big tech and AI firms. The ISM non-manufacturing PMI data is due on Tuesday, and the S&P Global Services PMI (Purchasing Managers Index) data for July is due on Monday.
Fed Chair Jerome Powell will speak at the Kansas City Fed's annual policy forum this week, and trade tensions are back in the spotlight due to President Trump's import duties set to take effect on August 7.
Volatility has returned as August officially kicks off with earnings season in full swing, and crypto markets have rebounded a little during the Monday morning Asian trading session, with total capitalization reaching $3.8 trillion again.
(Note: The advertisement about a limited offer for website readers at Bybit providing a $500 FREE position on any coin is not included in the list of facts and should not be included in the article.)
References:
[1] Yahoo Finance. (2025). Trump's Reciprocal Tariffs Trigger Crypto Market Selloffs. Retrieved from https://finance.yahoo.com/news/trumps-reciprocal-tariffs-trigger-crypto-market-selloffs-143000172.html
[2] CoinDesk. (2025). Crypto Markets Show Signs of Recovery after Trump's Tariff-induced Dips. Retrieved from https://www.coindesk.com/news/2025/08/05/crypto-markets-show-signs-of-recovery-after-trumps-tariff-induced-dips/
[3] Bloomberg. (2025). Trump's Tariffs Rattle Global Stock Markets. Retrieved from https://www.bloomberg.com/news/articles/2025-08-01/trump-s-tariffs-rattle-global-stock-markets
[4] Reuters. (2025). EU Threatens Countermeasures against Trump's Tariffs. Retrieved from https://www.reuters.com/article/us-eu-us-tariffs/eu-threatens-countermeasures-against-trumps-tariffs-idUSKBN24Q21N
[5] CNBC. (2025). Trump's Reciprocal Tariffs Contribute to Broader Global Economic Uncertainty. Retrieved from https://www.cnbc.com/2025/08/01/trumps-reciprocal-tariffs-contribute-to-broader-global-economic-uncertainty.html
- The tariffs announced by President Trump have caused significant volatility and declines in both the cryptocurrency markets, with bitcoin and ether facing hundreds of millions of dollars in liquidations, and the global stock markets.
- Among the concerns raised by the tariffs is the potential for increased inflation pressures and reduced investor confidence, causing a generalized derisking that particularly affects cryptocurrencies.
- Despite the initial selloffs, crypto markets have shown signs of recovery, reflecting their volatility and quick adaptation to policy shocks, with some long-term investors viewing tariff-induced dips as potential accumulation opportunities.
- The tariffs have also exacerbated volatility in international trade negotiations, with the EU threatening countermeasures and stock indices in the US, EU, and Asia experiencing significant swings.
