Bitcoin, Ethereum Sink as Tariff Gloom Tops Rate Cut Optimism

The price of Bitcoin and other cryptocurrencies wavered on Friday as investors weighed the White House’s latest round of tariffs against fresh signs of a weakening U.S. labor market.

Bitcoin was recently changing hands around $115,500, a 2.1% decrease over the past day, according to crypto data provider CoinGecko. Ethereum fell 3.8% to $3,630, while XRP and Solana showed similar losses at $3.05 and $169, respectively.

Stock indices swooned, with the S&P 500 falling 1.5% midday. The tech-heavy Nasdaq dropped 2%, while the Dow Jones Industrial Average tumbled over 570 points.

On Thursday night, the Trump administration refreshed rates for over 60 countries, indicating in an executive order that a new round of sweeping levies would go into effect on Aug. 07 at 12:01 a.m., as opposed to a self-imposed deadline on Friday that was previously in place.

The U.S. hiked levies on Canadian imports to 35% from 25%, although goods brought in under a trade agreement with Mexico and Canada are exempt. Brazil was among countries facing the steepest levies at 50%. The administration signaled it was still open to negotiating.

Twists and turns in U.S. President Donald Trump’s trade policy gripped markets months ago, but attention faded as the administration inked 90-day extensions with scores of nations. 

A tariff reprieve established between the U.S. and China expires on Aug. 12, but on CNBC Thursday, U.S. Treasury Secretary Scott Bessent said the U.S. has “the makings of a deal” with the country’s largest trading partner following trade talks in Stockholm, Sweden.

The U.S. economy added 73,000 jobs in July as the unemployment rate stayed flat at 4.2%, the U.S. Labor Department said on Friday. Alongside cooler-than-expected job growth, the government revised figures for May and June, wiping away 258,000 jobs.

In May and June, the U.S. added only 19,000 and 14,000 jobs, respectively, as opposed to 144,000 and 147,000 jobs detailed in the initial reports, according to Trading Economics.

The report indicated that the headline unemployment rate could be masking weakness in the underlying U.S. labor market, days after officials at the Federal Reserve decided to hold interest rates steady for a fifth straight meeting at a target range of 4.25% to 4.5%.

Despite months of pressure from Trump to lower rates, Fed Chair Jerome Powell indicated that the central bank wasn’t committed to cutting rates in September. Fed Governors Michelle Bowman and Christopher Waller dissented during the meeting, the first time that two members of the Federal Open Market Committee broke away from the group since 1993.

Traders penciled in an 78% chance on Friday that the Fed cuts rates at its next meeting, up from 37% a day before, per CME FedWatch. Matt Mena, a research analyst at crypto asset manager 21Shares told Decrypt that growing certainty toward cuts will likely benefit crypto.

“Now that rate cuts are back on the table for the next Fed meeting, liquidity conditions may open up again—a powerful tailwind for risk assets like crypto,” he said. “If a Fed cut becomes all but guaranteed, Bitcoin could quickly propel toward $125K.”