Bitcoin News Today: U.S. Policy Shifts Send Crypto Market Cap Below $4 Trillion in August 2025

The cryptocurrency market experienced a notable downturn in August 2025, with the total market capitalization falling below $4 trillion amid a significant policy shift in the United States. The correction was largely attributed to a sharp sell-off in leading assets like Bitcoin and Ether, triggered by statements from U.S. Treasury Secretary Scott Bessent regarding the suspension of new government Bitcoin purchases [2]. This policy decision sent ripples through the market, causing immediate reassessment by investors and heightened volatility across the sector [3].

Bitcoin dropped to approximately $115,000, while Ether fell to below $4,300, marking one of the most significant declines in recent months [2]. The decline was accompanied by over $963 million in liquidations, as leveraged positions were unwound and corporate treasuries—particularly those with exposure to assets like Solana and Metaplanet—faced valuation pressures [3]. The broader sell-off extended into altcoins, with heavy declines in tokens such as Solana and Toncoin reflecting the intensified market stress [3].

The timing of the correction coincided with a period of profit-taking, as traders moved to lock in gains following recent price surges driven by macroeconomic optimism and institutional adoption [3]. On a single day in early August, the market shed roughly $71 billion in value amid heightened geopolitical tensions and uncertainty about U.S. Federal Reserve policy [4]. The total value had previously reached a peak above $4.2 trillion just days earlier [5], indicating a rapid but not necessarily unsustainable correction.

Industry analysts, including Benjamin Cowen, have noted that the pattern resembles historical post-halving cycles, where Bitcoin often experiences a mid-year rally followed by a sharp decline in late summer [3]. While the current sell-off appears to reflect shifting investor sentiment and regulatory caution, it has not necessarily signaled a breakdown in market fundamentals. Instead, it underscores the sector’s continued sensitivity to macroeconomic and policy-driven developments.

As the market continues to adjust, the broader implications will depend on how investors and institutions respond to policy clarity and macroeconomic stability in the coming months [2]. For now, the correction serves as a reminder of the cyclical nature of the crypto market and the influence of key regulatory decisions on investor behavior [6].

Sources:

[1] https://finance.yahoo.com/news/total-market-cap-cryptocurrencies-just-083000741.html

[2] https://www.mitrade.com/insights/news/live-news/article-3-1048484-20250818

[3] https://nai500.com/blog/2025/08/crypto-market-slides-below-4-trillion-as-btc-eth-cool/

[4] https://www.ainvest.com/news/bitcoin-news-today-cryptocurrency-market-loses-71-billion-fed-rate-cut-hopes-diminish-2508/

[5] https://blockonomi.com/why-is-the-crypto-market-down-today-4/

[6] https://www.mitrade.com/au/insights/news/live-news/article-3-1047873-20250818