Massive Losses of $600 Million in Long Bitcoin Positions Occur as Cryptocurrency Hits 3-Week Low Due to Surprise Trump Tariff Announcement
In the midst of 2025, President Trump's latest tariff adjustments have sent shockwaves through the cryptocurrency market, particularly affecting Bitcoin and Ethereum. The tariffs, which include steep duties on imports from major trading partners like Canada and transshipped goods, have spooked investors, exacerbating fears of a global slowdown and prompting a flight to safer assets.
On August 1, Bitcoin dropped by several thousand dollars to a multi-week low of under $114,500 due to Trump's tariff adjustments. The digital currency's price recovered to almost $119,000 after the Federal Reserve's decision to maintain interest rates, but it dumped by more than four grand to a multi-week low of $114,400 after Trump's executive order.
Ethereum, too, experienced sizeable sell-offs amid broader crypto market stress, coinciding with a $1.1 trillion crypto-wide liquidation affecting Bitcoin, Ethereum, and XRP. The altcoins, such as Ethereum and Ripple, have dropped by 6%, while several others have nosedived by double digits.
This substantial correction has wrecked more than 160,000 over-leveraged traders, with the total value of liquidated positions reaching up to $650 million, with longs responsible for more than $600 million out of the total.
The tariffs, as noted by The Kobeissi Letter, have "lost all credibility." Many economic experts, including The Kobeissi Letter, have offered insights on the potential impact of these tariffs on the financial markets, including crypto.
The overall crypto market has become jittery and sensitive to geopolitical shifts, with amplified risk from regulatory uncertainty tied to Trump’s 160-page crypto roadmap announced alongside the tariffs. Despite the initial volatility and price drops—Bitcoin fell from highs above $108,000 to around $80,000 over several months—some analysts remain cautiously optimistic about Bitcoin’s medium-term outlook, expecting resistance near $110,000 and a potential rally once bearish sentiment subsides.
However, the longer-term recovery depends on resolving trade disputes and clearer regulatory guidance around crypto assets and DeFi. In summary, Trump’s 2025 tariff changes have acted as a macroeconomic shock that led to significant short-term price declines and heightened volatility for Bitcoin and Ethereum, reflecting their evolving role as indicators of global economic sentiment and risk appetite.
[1] Source: The Kobeissi Letter [2] Source: CoinDesk [3] Source: Bloomberg [4] Source: Forbes
- The Kobeissi Letter, an economic analysis publication, stated that President Trump's tariff adjustments have "lost all credibility."
- Bitcoin, the leading cryptocurrency, dropped by several thousand dollars due to Trump's tariff adjustments, reaching a multi-week low of under $114,500.
- Ethereum, considered an altcoin, also experienced sizeable sell-offs, dropping by 6% along with Ripple, while several others nosedived by double digits.
- The overall crypto market has become sensitive to geopolitical shifts, with amplified risk from regulatory uncertainty tied to Trump’s crypto roadmap, potentially impacting the medium-term outlook and longer-term recovery of Bitcoin and Ethereum. [Sources: The Kobeissi Letter, CoinDesk, Bloomberg, Forbes]
