5 Market-Shaking Catalysts: How Tariffs & ETFs Triggered Bitcoin’s 2025 Price Plunge
Bitcoin just took a nosedive—and Wall Street's usual suspects are to blame. Here's what really cracked the crypto king's throne.
1. The ETF Hangover Hits Hard
Post-approval euphoria faded faster than a meme coin's hype cycle. Institutions flipped from buyers to profit-takers, draining liquidity.
2. Tariff Wars Go Digital
New U.S.-China tech sanctions accidentally targeted mining ops. Hashrate wobbled, spooking weak hands into panic sells.
3. Leverage Liquidation Dominoes
Those 100x perpetual contracts? Poof. A 15% dip became 30% as overcollateralized degens got margin-called into oblivion.
4. The 'Institutional Whale' Myth
Turns out BlackRock's Bitcoin fund was just three hedge funds in a trench coat—and they all dumped simultaneously.
5. Regulatory Deja Vu
SEC Chair's "we're still not happy" speech triggered PTSD flashbacks to 2021. Cue the algorithmic sell bots.
Silver lining? The dip puts Bitcoin right back in its historical buy zone. But hey—if you believe the 'digital gold' narrative, you've already DCA'd through worse. *Cue Wall Street "experts" suddenly remembering inflation exists.*
Macro Reasons
The overall BTC correction this week began on Wednesday evening, hours after the US Federal Reserve decided to ignore Trump’s pleas for a rate reduction and left them unchanged. Although this decision was entirely expected, even after the positive US GDP report for Q2, which went out the same day, BTC’s price dipped by a few grand.
The asset managed to recover some of the losses by Thursday, but the Fed’s refusal to pivot from its policy has to be named as the first possible reason behind BTC’s overall drop.
The POTUS’s tariffs are second in line, as many of them took effect starting from August 1 (Friday). Additionally, TRUMP made some last-minute changes, which included adding new countries to the list and raising the tariffs against certain Canadian goods.
The 47th US President made the news once again on Friday evening by ordering two nuclear submarines to be positioned in “the appropriate regions” around strategic Russian locations. This came as a response to a speech by Dmitry Medvedev, a former Russian President, about the growing risks of a war between nuclear-armed adversaries.
Although this concludes our list of three possible macro reasons behind BTC’s correction, here are some bonuses that might have had a smaller impact. First, India said it will continue to buy oil from Russia despite Trump’s threats. Second, the POTUS claimed that the unfavorable jobs numbers that were announced on Friday were “rigged” by a Biden appointee.
BREAKING: President Trump says today’s jobs numbers were rigged to make him and the Republicans look bad. pic.twitter.com/lmLzvNiUEQ
— The Kobeissi Letter (@KobeissiLetter) August 1, 2025
Sell-Offs
The second portion of our list includes two main sale-off reasons, which the aforementioned global events and uncertainty may have provoked. At first, reports emerged on Friday during the initial phase of this correction that retail investors had begun disposing of large quantities of their bitcoin holdings.
Their behavior was mimicked to a large extent by investors using the spot Bitcoin ETFs to get some BTC exposure. The ETFs broke a five-day positive streak on Thursday when $114.8 million left the funds, according to data from Farside. The landscape worsened on Friday as investors pulled out $812.3 million in what became the worst single-day performance since February 25.
