Crypto Takes a Hit: What's Shaking Up the Market?

Unexpected PPI Jump Shakes Markets

The Producer Price Index (PPI) surged by 0.9% in July, marking the highest jump in over three years. This unexpected rise, far exceeding the anticipated 0.2%, sent shockwaves through the financial markets.

Cryptocurrencies Feel the Pinch

Bitcoin and Ethereum Drop

• Bitcoin (BTC) fell to $118,000, a 2.9% decrease from the previous day.
• Ethereum (ETH) also dropped by 2.9%, reaching $4,560.

Other Major Cryptocurrencies

• Solana (SOL) declined by 2.4% to $194.
• XRP saw a 5.7% drop, falling to $3.07.

A Damper on a Strong Week

Just a day before, Bitcoin had reached a new all-time high above $124,000, and Ethereum was approaching its own record levels. The PPI report put a damper on what had been a promising week for cryptocurrencies.

Why the PPI Matters

The PPI tracks price changes for a wide range of goods and services. A significant jump like this one raises concerns about inflation, which the Federal Reserve has been trying to control.

Impact on Interest Rate Cuts

• September Rate Cut Chances: Dropped slightly from 94.3% to 92.8%.
• 50-Basis-Point Cut: Fell dramatically from 5.7% to 0.0%.

Government's Bitcoin Stance

U.S. Treasury Secretary Scott Bessent clarified that the government isn't planning to buy more Bitcoin. Instead, confiscated assets will be used to build up the Bitcoin reserve.