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Crypto market wipes out $150 billion in a day amid new tariffs

Crypto market wipes out $150 billion in a day amid new tariffs

Just last week, President Donald Trump voiced his optimism that the Federal Reserve would soon start cutting interest rates after a private meeting with Chair Jerome Powell.

However, upon the central bank’s decision to leave interest rates unchanged, things took a drastic turn on Thursday, July 31.

Namely, the Federal Reserve kept its benchmark rate at 4.25–4.5%, citing the need for more economic data before making any cuts. 

The crypto market reacted negatively following the news, with over $150 billion in market value wiped out in a day, falling from $3.89 trillion to $3.74 trillion. 

Crypto market cap. Source: CoinMarketCap

Cryptocurrencies see multi-week lows

In the aftermath, Bitcoin (BTC) dropped as low as $114,400, its lowest price in three weeks, while Ethereum (ETH) dropped 4.94% to $3,628.

Something similar happened in April, when Trump announced his first tariff increases. At the time, Bitcoin plunged to a five-month low within days of the announcement, while the market wiped out nearly $500 billion.

Altcoins took an even bigger hit. XRP, for instance, dropped by 7.38%, while SPX6900 (SPX) plunged by no less than 17.44%, just days after becoming the best-performing coin in the past 90 days.

Looking ahead, traders on Polymarket, a crypto-oriented prediction platform, bet that there’s almost a 60% chance we’ll see zero to one Fed rate cuts by the end of 2025.

Fed rate cuts predictions. Source: Polymarket

The change in market sentiment likely reflects rising inflation worries and renewed trade war issues. 

Since the global crypto market capitalization has declined by 3.82% to $3.74 trillion since the Federal Reserve’s announcement, many are left wondering how things are going to play out for digital assets.

Featured image via Shutterstock

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