After Trump tariff letter drops, $120B vanishes from crypto markets

The cryptocurrency market nosedived 4.5% in 24 hours following the release of President Donald Trump’s tariff letters to 14 nations, with Bitcoin miner stocks and major indices like the S&P 500 also posting steep losses.

The letters, imposing duties of 25% to 40%, have amplified fears of a global trade war, compounding existing pressures from delayed Federal Reserve rate cuts.

“This is a classic risk-off moment,” said Mark Connors, research head at 3iQ. “The Trump tariff letter signals escalating protectionism, and crypto—often a liquidity proxy—is getting hit first.”

How the Trump tariff letter rattled global markets

1. Crypto bears take control as Bitcoin slips below $108K

The total crypto market cap shed $120 billion after the Trump tariff letter was disclosed, with Bitcoin (BTC) dropping 1.56% to $107,688 and Ethereum (ETH) falling 1.89%. Dogecoin (DOGE) led losses among majors, crashing 4.78%.

Publicly traded crypto firms mirrored the slump:

• MicroStrategy (MSTR): -2%

• Robinhood (HOOD): -1%

• Bitcoin miners (e.g., Marathon Digital): -5% to -8%

“Tariffs disrupt supply chains and inflation expectations, which directly impact risk assets like crypto,” — Lyn Alden, macroeconomist.

2. Stocks sink as Treasury yields spike

The Dow Jones plunged 422 points, while the 10-year Treasury yield surged to 4.4%, reflecting dwindling hopes for Fed relief. The CME FedWatch Tool now prices just a 61.9% chance of a September rate cut, down from 90% two weeks ago.

“Deficit spending is driving yields, not tariffs alone. But the Trump tariff letter is the trigger for this sell-off,”, according to The Kobeissi Letter.

3. Experts warn of prolonged volatility

Economists criticized the Trump tariff letter as economically misguided. Peter Schiff noted Japan and South Korea’s sub-2% tariffs on U.S. goods, arguing deficits stem from consumer preferences, not trade policy.

With tariffs taking effect August 1, analysts foresee further declines:

• Crypto liquidations could accelerate if BTC breaks $105K support.

• Fed inaction may extend stock market losses.

“Markets are pricing in stagflation—slow growth plus inflation. The Trump tariff letter exacerbates both,” — Raoul Pal, Real Vision CEO.