- Tariffs caused a $600M crypto liquidation.
- Bitcoin fell below $115,000.
- Market reaction due to trade war escalation.
Trump’s tariff increase on Canadian goods on August 1, 2025, caused a significant crash in the crypto market, with Bitcoin plunging under $115,000 and massive liquidations ensuing.
The market reacted sharply to the unexpected tariffs, highlighting potential vulnerabilities and the heightened volatility associated with geopolitical tensions impacting cryptocurrency values.
Impact of Tariffs on Cryptocurrency
On August 1, 2025, the Trump administration enforced new tariffs, resulting in a sharp decline in the crypto market. Over $600 million in long positions were liquidated, and Bitcoin prices fell significantly.
President Trump implemented a 10% tariff on most imports and increased Canadian tariffs to 35%. The executive order aimed to address a national emergency, causing widespread market turbulence.
Donald Trump, President of the United States, said, “I have determined that it is necessary and appropriate to deal with the national emergency declared in Executive Order 14257 by imposing additional ad valorem duties on goods of certain trading partners” – source
Increased tariffs from the Trump administration had immediate effects. The crypto market experienced substantial volatility, with Bitcoin dropping to a multi-week low. Investor sentiment shifted to risk aversion, exacerbating the downturn.
Financial markets reacted immediately, leading to increased selling pressure across major cryptocurrencies. The trade war’s impact extended beyond natural borders, affecting global crypto investments and market health.
“The market says the trade war has lost all credibility: President Trump just seemingly just randomly decided to raise tariffs on Canada from 25% to 35%…” – The Kobeissi Letter, Financial Commentator – source
Market participants reacted with caution, focusing on crypto’s potential response to evolving trade policies. Such measures have historically triggered volatility in crypto, paralleling past US-China tariff tensions.
Insights suggest that the current deleveraging event aligns with past macroeconomic disturbances. Historical trends reveal that regulatory measures induce short-term market turbulence, often followed by gradual rebounds as stability resumes.
