Bitcoin News Today: Bitcoin’s Fate Hangs in the Balance at Jackson Hole

The relationship between inflation and cryptocurrency, particularly Bitcoin, is intensifying as recent economic developments raise questions about the Federal Reserve’s potential interest rate decisions and their implications for digital assets. Despite Bitcoin hitting a record high earlier in the month, the price subsequently retreated to around $114,700 amid heightened macroeconomic concerns and a surge in forced selling of long positions. Over $530 million in liquidations were recorded within 24 hours, according to data from CoinGlass, with significant portions attributed to Bitcoin and Ethereum positions. This price correction came after July’s producer price index (PPI) and consumer price index (CPI) data signaled rising inflationary pressures, complicating the narrative around an anticipated September rate cut.

The broader cryptocurrency market mirrored this downward trend, with the CoinDesk 20 index slipping 1.2%. Despite short-term volatility, analysts have noted that recent pullbacks may represent healthy corrections rather than signs of a deeper bearish shift, supported by ongoing inflows into Bitcoin and Ethereum exchange-traded funds (ETFs). For example, Ethereum-related ETFs posted a record $2.9 billion in inflows for the week, marking their 14th consecutive week of net inflows. These figures suggest sustained institutional and corporate demand, which may help cushion the market against further declines.

The Federal Reserve’s upcoming Jackson Hole symposium in Wyoming has become a focal point for investors seeking clarity on the central bank’s policy trajectory. Treasury Secretary Scott Bessent has speculated that a 50-basis-point rate cut in September is possible, a position that mirrors expectations from the 2024 rate reductions that previously fueled a Bitcoin price surge. However, analysts caution that any deviation from aggressive rate-cutting could tighten financial conditions and pressure crypto prices. “If the Fed looks more cautious on rate cuts, we could see reduced momentum in the crypto space through the fall,” said Carolane de Palmas, a market analyst at Activtrades. This cautious outlook underscores the extent to which Bitcoin’s short-term performance remains sensitive to liquidity cycles shaped by Federal Reserve policy.

Amid these macroeconomic dynamics, President Donald Trump has been a vocal advocate for significant rate cuts, even suggesting a reduction of 3 to 4 percentage points to 1% to stimulate economic growth and reduce borrowing costs. However, the administration’s simultaneous implementation of broad import tariffs has introduced complications, as recent producer price data revealed a 0.9% month-on-month increase in July—the largest gain since June 2022. This inflationary spike has been attributed to surging costs in both goods and services, with services inflation accounting for over 75% of the PPI increase. Analysts warn that tariffs may delay rather than resolve these inflationary pressures, given the time it takes for wholesale-level price changes to filter into consumer pricing.

The debate over the Fed’s response to inflation and employment data has become a defining feature of the economic landscape. While the labor market remains resilient—with 73,000 new jobs added in July—concerns persist about its long-term sustainability. Federal Reserve officials are divided on the timing and magnitude of rate cuts, with some suggesting the current labor market remains “in good health” despite signs of cooling. This uncertainty has kept investors on edge, as the outcome of the upcoming Jackson Hole symposium and subsequent policy meetings will likely determine the trajectory of both traditional financial markets and the crypto sector. In this context, Bitcoin’s future remains closely tied to the evolving expectations of Federal Reserve actions, with each policy shift potentially reverberating through asset prices and investor sentiment.

Source:

[1] Crypto Market Today (https://www.cnbc.com/2025/08/18/crypto-market-today.html)

[2] Bitcoin Sell Pressure 'Palpable' as BTC Bid Support Stacks (https://cointelegraph.com/news/bitcoin-sell-pressure-palpable-btc-bid-support-stacks-at-105k)

[3] Wall Street Issues Serious $6.6 Trillion Crypto Warning (https://www.forbes.com/sites/digital-assets/2025/08/19/wall-street-issues-serious-66-trillion-crypto-warning-as-price-crash-fears-hit-bitcoin-ethereum-and-xrp/)

[4] 'I'm Confused!' Why Does President Trump Want a Rate Cut So Badly? (https://www.morningstar.com/news/marketwatch/20250816188/im-confused-why-does-president-trump-want-a-rate-cut-so-badly)

[5] President Trump Said the Fed Should Lower Interest Rates by 3 or 4 Points to 1% (https://ln24international.com/2025/08/18/president-trump-said-the-fed-should-lower-interest-rates-by-3-or-4-points-to-1)

[6] Trump's Tariffs Will Slow National Debt Growth, but Not Pay It (https://fortune.com/2025/08/17/trump-tariffs-pay-national-debt-interest)

[7] US Producer Inflation Heats Up as Goods, Services Prices Soar (https://www.reuters.com/world/us/us-producer-inflation-heats-up-goods-services-prices-soar-2025-08-14/)

[8] CPI Home: U.S. Bureau of Labor Statistics (https://www.bls.gov/cpi/)

[9] 'The Risk That's on Our Doorstep' (https://finance.yahoo.com/news/the-risk-thats-on-our-doorstep-july-inflation-data-has-economists-on-edge-133057270.html)