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As CNBC reported, this drop ushered in a wave of long liquidations, forcing traders to sell their assets at market price to settle their debts, bringing prices down further. Bitcoin saw $228 million in liquidations across centralized exchanges over a 24-hour period, the report said, citing CoinGlass, while ether saw $262 million.
The dip in prices followed an uptick in investor caution following President Donald Trump’s issuance of new tariffs, leading to concerns about inflation and the Federal Reserve’s ability to lower interest rates, the report added.
At times of broad based derisking, the report notes, crypto often falls as investors sell off speculative and volatile assets. At the same time technical resilience and institutional demand for bitcoin and ether are helping bolster their prices.
“After running red hot in July, this is a healthy strategic cooldown. Markets aren’t reacting to a crisis, they’re responding to the lack of one,” Ben Kurland, CEO at crypto research platform DYOR, told CNBC. “With no new macro catalyst on the horizon, capital is rotating out of speculative assets and into safer ground … it’s a calculated pause.”
Writing about the crypto sector’s reaction to tariffs in April, PYMNTS argued that the levies could affect the blockchain ecosystem more broadly, with supply chain disruptions impacting miners and blockchain developers, especially if components like semiconductors become more expensive due to tariffs.
“However, the decentralized nature of blockchain technology might also provide opportunities for innovation in cross-border transactions, potentially mitigating some of the negative effects of tariffs,” that report added.
“While Trump’s tariffs have introduced significant uncertainty into the global economic landscape, the crypto and blockchain sectors are poised to navigate these challenges. In the short term, volatility and risk aversion may dominate, but the long-term prospects for cryptocurrencies as stores of value and mediums of exchange remain promising.”
Meanwhile, recent research by PYMNTS Intelligence examines the way corporate chief financial officers (CFOs) are responding to the new tariffs, finding that they are planning, not panicking.
“The only certainty that today’s uncertainty provides is that firms can no longer take open access to international inputs for granted. Instead, they are being forced to rethink, retool and in many cases, reshuffle operations — just to maintain a competitive edge,” PYMNTS wrote last week.
“A more complex and dynamic model of product leadership is emerging. One that blends supply chain awareness, geopolitical acumen, digital capability and agile product thinking.”
