Market sentiment took a sharp turn this week as traders shifted to a more cautious tone after initial excitement. Pump.fun’s PUMP token faced a setback when Gate.io removed its presale announcement, which had hinted at a $600 million target for July 12. On the other hand, Bit Digital made headlines by selling all its Bitcoin holdings and converting its entire treasury to Ethereum, accumulating over 100,000 ETH valued at $254.8 million, making it one of the largest public ETH holders.
However, the real shock came when the crypto market plunged by 4.5% following President Trump’s unexpected tariff letters to 14 countries. Bitcoin, Ethereum, and Dogecoin experienced significant drops, with the impact spreading to crypto stocks and broader markets, causing renewed investor anxiety.
The new tariffs, ranging from 25% to 40%, are set to take effect on August 1, 2025. Countries like South Korea, Japan, Malaysia, and South Africa were among the first to receive the notices. Trump justified the tariffs as a response to persistent trade deficits, warning of further hikes if retaliation follows. Critics like economist Peter Schiff argue that these measures miss the mark and that the real issue lies in U.S. competitiveness rather than unfair foreign practices.
Some crypto users believe that countries like South Africa and Malaysia are being targeted for aligning with BRICS and China, while pressure on Japan and South Korea aims to secure loyalty in key supply chains. The escalating tariff war is causing increased tension in the global market.
Meanwhile, hopes for a Fed rate cut are fading, with the chances dropping to 61.9% for a cut by September, down from 90% just weeks ago. Yields are rising regardless of trade war news, indicating that deficit spending is now driving the economy. With tariffs looming and market volatility on the rise, traders are preparing for more uncertainty in the coming weeks.
The uncertainty surrounding the tariff deadline has weakened investor confidence and overall risk appetite, impacting the crypto market. Price action remains choppy, with most altcoins struggling to gain momentum. Bitcoin dipped below $108K, settling at $107K, while Ethereum saw a slight drop to $2,554. XRP and Polygon experienced modest gains, while Dogecoin and Solana faced deeper losses.
Investor focus is now turning to the upcoming “Crypto Week” starting on July 14, where key U.S. bills like the CLARITY Act and Anti-CBDC Surveillance State Act could shape the future regulatory landscape for digital assets.
The impact of the tariff news wasn’t limited to crypto; stocks also took a hit. Bitcoin miners saw steep declines, and tech-related equities like MicroStrategy and Robinhood fell by 2% and 1%, respectively. The Dow Jones, S&P 500, and NASDAQ all closed significantly lower, highlighting the broad impact of the trade tensions on the financial markets.