Crypto Market Faces Headwinds: Jobs & Tariffs Hit BTC

Headline News: The First Crack in the Jobs market

Last week, Bitcoin fell 4.36% amid a broader market sell-off, driven by a confluence of macro headwinds including a hawkish Federal Reserve, persistent inflation, and a significant downward revision in jobs data. Market anxiety intensified, with the VIX surging by 545bps last week. This risk-off sentiment reflected in Bitcoin ETFs, culminating in a historic $812.25 million net outflow last Friday—the second largest on record.

Macro-Outlook: Trade Disturbance Reflects on Jobs Demand

President Trump signed an executive order imposing new “reciprocal” tariffs on approximately 69 countries, effective on August 7. The executive order includes baseline tariffs of 10%, and notably 25% on Indian goods, 35% on Canadian goods, 15% on Korean goods, 50% on Brazilian goods, 20% on Taiwan and Vietnam, a 90-day delay for Mexico and more. Trump also imposed a 50% tariff on imports of semi-finished copper products and copper derivative products.
While there was no formal ruling in the latest hearing in the Court of Appeals on July 31, challenging the President’s authority to impose broad tariffs. Legal analysts widely believe, based on the tone and substance of the hearing, the court is leaning toward upholding the lower court’s decision and estimated ruling to be delivered around late August or September. However, the case is expected to appeal to the Supreme Court, which could extend the court challenge to at least the second quarter of 2026.
The US Treasury kept the quarterly treasury refunding size steady with focus on shorter term debts.
The US advanced Q2 GDP increased to 3%, beating expectations of a 2.4% rise. The expansion primarily reflected by plunge in imports and increase of consumer spending on goods. The US ISM manufacturing PMI decreased to 48, missing expectations for an increase to 49.5.
The US core PCE increased by 0.3% in June, in line with market forecasts. The headline PCE increased to 2.6% in June, slightly higher than market forecasts of 2.5%. Personal income and spending both increased by 0.3% in June, higher than market expectations for personal income, but lower than expectations for personal spending.
The Federal Reserve kept the rate unchanged in June, but two dissenters preferred a rate cut, the first double dissent in more than 30 years. The probability of a rate cut in September decreased from approximately 63% to 37% after the hawkish tone of Fed Chair Powell in the press conference, but later surged to 80% after the latest jobs report showed weakening signs.
The US unemployment rate rose slightly to 4.2% in July, aligning with market expectations. Labor force participation rate dipped by 0.1 percentage point to 62.2%. US non-farm payrolls increased by 73K in July, well below expectations of 100K. The non-farm payrolls in May and June were revised significantly downwards by 258K, suggesting the labor market cooling more rapidly than initially anticipated. JOLTs job openings in June fell to 7.437 million, below market expectation of 7.55 million.
President Trump also criticized the statistics from Bureau of Labor Statistics (BLS) as not accurate and highly political, announcing dismissal of Dr. Erika McEntarfer as the Commissioner of the BLS, and plans to appoint a new BLS head in the following days. The action raised concerns over the independence of US economic statistics in the future.

Upcoming Economic Calendar including,

Tuesday, August 5, 10:00pm: US ISM Service PMI in July

Weekly-Cryptos-Overview: “Golden Era of Crypto”

The White House Crypto Working Group released the Digital Assets Report, granting CFTC authority to regulate spot markets for non-security digital assets, urging Congress to advance the CLARITY Act, encourage SEC to create “fit-for-purpose” exemptions, implementing GENIUS Act, establish US Digital Stockpile and Strategic Bitcoin Reserve (no specific funding strategy within the report), pushing policymakers to embrace DeFi, directing IRS to publish clear crypto tax guidance and reporting of foreign crypto accounts.
The SEC Chair Atkins outlined “Project Crypto“, aiming to support President’s goal of establishing America as the “crypto capital of the world”. Atkins plans to modernise rules and regulations to enable the financial market to move on-chain, facilitating “Super-Apps”, fostering innovation with “Innovation Exemption” and more.
The SEC also approved in-kind creation and redemption for crypto ETFs, increasing the trading efficiency of issuers, authorized participants and traders.
Grayscale introduced the new Grayscale Story Trust to accredited investors.
EToro announced 24/5 trading for 100 US stocks and ETFs, with plans to launch tokenised stocks on Ethereum soon.
Interactive Broker reportedly plans to launch stablecoin for 24/7 account funding and fund transfer.
Paypal launched “Pay with Crypto”, enabling US merchants to accept over 100 cryptocurrencies with near-instant conversion to fiat or stablecoins with 0.99% transaction fee.
Visa integrated Paypal’s pyUSD, Paxos’ USDg, Circle’s EURC, along with Stellar and Avalanche blockchains.
FIS partnered with Circle integrating USDC into its Money Movement Hub, enabling US financial institutions to offer secure, real-time domestic and cross-border stablecoin transactions.
CBOE filed Generic Listing Standards for Crypto Asset ETPs with the SEC, setting a framework which tokens can be listed as ETPs if they have futures market on a Designated Contract Market for at least 6 months.
JPMorgan partnered with Coinbase to seamlessly link their bank accounts to Coinbase wallets, transfer of Chase Ultimate Rewards Points to Coinbase accounts and fund Coinbase accounts using Chase credit cards.

Layer 1 and Layer 2s

The Ethereum Community Foundation released BlobKit, an SDK that allows developers to seamlessly write to blobspace.
Hyperliquid experienced network outage due to congested API servers. The team plans to refund affected users in the coming days.
Avalanche partnered with Grove to launch $250 million worth of RWA deployment, including JTRSY on Avalanche.
Sonic partnered with Paint Swap to launch Airdrop Oderbook, enabling users to trade vested and unvested airdrop as fNFTs with market determined discounts.
Daehong Communications launched Giftiel, its mobile voucher service, on Aptos.
U-Power announced tokenising its battery-swap & charging infrastructure on IoTex and accumulating IOTX as its corporate strategic reserve asset as well.
Plasma Blockchain completed $373 million public sales with 7x in oversubscription. The team plans to launch the mainnet soon with $1 billion in stablecoin.
Polygon experienced an hour network outage as the system that manages validators went offline caused by a validator exit.
EigenLayer launched EigenDA v2 on the mainnet with 100MB/s throughput, 6.7x faster than v1.
Rise Chain introduced Shred API, enabling dapps to achieve real-time continuous execution and updated global state before the completion of a block.

Dapps

Pendle launched on HyperEVM mainnet, offering several yield markets such as hnUSDT, hbHYPE, liquidHYPE and kHYPT.
Terminal Finance, the liquidity hub for sUSDe on Converge Network, partnered with Euler to enable collaterising Pendle PT tUSDe for looping.
Metamask introduced Stablecoin Earn, enabling users to directly deposit USDT, USDC and DAI to Aave.
Ethena introduced Liquid Leverage, incentivising users to deposit sUSDe and USDe to Aave and complete at least one loop. This allows sUSDe stakers to easily adjust yield exposure without the 7-day withdrawal limitation.
Gala Games announced Shrapnel, a popular web3 shooting game, migrating from Avalanche to GalaChain to integrate with China’s Trusted Copyright Chain (TCC) and access the Chinese market.
Orca released its own version of token launchpad, Wavebreaker, with proprietary anti-bot technology to prevent bot sniping.
GammaSwap launched the first yield token, gETH, on Base. The yield token earns liquidity fees from Uniswap V3 without impermanent loss exposure.
Drift announced zero fees on BTC and ETH perpetual trading on the platform. Drift trading volume reached an all-time-high in July. The team also announced integrating Jito’s BAM for encrypted, faster and custom transaction ordering soon.
Ebisu Finance, a fork of Liquity V2, was launched, enabling users to borrow against sUSDe with approximately 4.3% fixed interest, which potentially creates a good looping opportunity.
Backpack has integrated Sei Network into its self-cutodial wallet and trading platform.
Clearpool introduced cpUSD, a permissionless PayFi Credit yield bearing token that powers real-world short term liquidity for remittances, credit card settlements, forex settlements and more.

Upcoming Alpha and Governance

The UK FCA opens retail access to crypto ETNs on FCA-approved exchanges, on August 8.
President Trump urged Russia to cease its military operations in Ukraine by August 7~9, or face “severe tariffs” on Russian goods and secondary sanctions on Russian trade partners. Trump also announced that he had ordered the deployment of two nuclear submarines to “appropriate regions”, further escalating geographical tension.
ChatGPT 5 announcement is expected on August 8, OpenAI-concept tokens such as World and Arkham may be affected.
Curve Finance proposed to pause all future Layer 2 expansion due to low utility, leading to waste of team resources. Curve emission is expected to be halved on August 12.
Aerodrome is expected to be integrated into the Base App in the upcoming weeks.
Linea Network announced its LINEA tokenomics with 85% token allocation to the community, 20% of net gas income will be burned and 80% will be used to burn LINEA. The ETH bridged to Linea Layer-2 will be eligible for native yield from staking and DeFi rewards.
Babylon proposed Multi-Staking, allowing BTC stakers that stake before September 1 to secure multiple networks and have more reward streams, and Co-Staking, reallocating 2% of BABY emission to stakers that stake both BABY and BTC.
Virtuals Protocol plans to further enhance Butler, a new agent that connects people on X with agents on Agent Commerce Protocol (ACP).
DYDX proposed to fund Grants Ltd with $8 million worth of DYDX, an independent entity to operate a new grants program to expand support for stakeholders across the protocol ecosystem.
Cardano passed the proposal to fund Input Output Engineering with approximately 96 million ADA for key development such as Hydra, Ouroboros Leios and many more.
Aave has passed a proposal to reduce its token emission and slashing percentage to stkAAVE and stkABPT, representing a total of approximately 26% reduction in emissions.
Solayer proposed to set the PoS annual inflation to 8% with 15% annual disinflation until reaching a long-term annual inflation of 2%.

Token Unlock

ENA token unlocked on August 5, amount representing 2.7% of the token supply.
JTO token unlocked on August 7, amount representing 3.15% of the token supply.
IMX token unlocked on August 8, amount representing 1.3% of the token supply.
APT token unlocked on August 12, amount representing 1.72% of the token supply.
PUMP token unlocked on August 14, amount representing 2.83% of the token supply.
STRK token unlocked on August 15, amount representing 3.33% of the token supply.
ARB token unlocked on August 16, amount representing 1.8% of the token supply.
VANA token unlocked on August 16, amount representing 1.47% of the token supply.
APE token unlocked on August 17, amount representing 1.92% of the token supply.
ZK token unlocked on August 19, amount representing 2.4% of the token supply.
ZRO token unlocked on August 20, amount representing 22.2% of the token supply.
KAITO token unlocked on August 20, amount representing 6.91% of the token supply.
PLUME token unlocked on August 21, amount representing 3.25% of the token supply.