In August 2025, the cryptocurrency market experienced a significant correction triggered by changes in US policy and declines in Bitcoin and Ether prices.
Reasons for the Sharp Correction in the Crypto Market
In August 2025, the total market capitalization of the cryptocurrency market fell below $4 trillion. This was driven primarily by significant declines in Bitcoin (BTC) and Ether (ETH) influenced by key US policy statements.
Impact of US Policy on the Crypto Market
US Treasury Secretary Scott Bessent announced the halt of new government Bitcoin purchases, contributing to market volatility. This decision led to immediate investor reassessment. Bessent stated that the government would not purchase additional Bitcoin for the strategic reserve, and reserve growth would be through seized assets, not new buys.
Analysis of Current Trends and Future Predictions
Following the policy shift, Bitcoin dropped to $115,000 while Ether fell to $4,300, reflecting broad market stress. The decline in market cap correlates with patterns seen in previous cycles, with Bitcoin traditionally rallying mid-year and crashing in September. Long-standing pressure on corporate treasuries highlights potential regulatory implications and investor caution.
The sharp correction in the cryptocurrency market in August 2025 emphasizes the influence of government policy on market trends and the need for careful monitoring of the situation.
