Bitcoin News Today: Bitcoin Ethereum Plunge 3.2% 2.5% Amid Bessent Comments Inflation Concerns

Bitcoin and Ethereum prices experienced a significant decline in the last 24 hours, with Bitcoin dropping over 3% and Ethereum more than 2%, according to CoinMarketCap data [1]. The sell-off was driven by macroeconomic developments that triggered bearish sentiment among investors. U.S. Treasury Secretary Scott Bessent's recent comments played a key role in the downward pressure on crypto prices.

In a Fox Business interview, Bessent stated that the U.S. government has no plans to purchase additional Bitcoin, despite an earlier executive order under Donald Trump suggesting the possibility of establishing a Strategic Bitcoin Reserve. Bessent clarified that the government will instead use only confiscated assets and will not sell its current holdings, which are estimated at $15–$20 billion [1]. This statement was perceived as bearish by the market, especially in light of the earlier expectation that the U.S. might continue to accumulate Bitcoin.

The impact of Bessent’s comments was compounded by his suggestion that the BITCOIN Act, proposed by Senator Cynthia, would not move forward. The bill, which aims to have the U.S. purchase 1 million BTC over five years, has been viewed as a bullish catalyst for the crypto market. With the possibility of such legislative action now in question, investor optimism has been curtailed [1].

On the other hand, Bessent’s disclosure about the U.S. holding 198,022 BTC—valued at around $23 billion—has been seen as a slight positive. This contradicts earlier reports that suggested a significant portion of U.S. Bitcoin holdings had been sold [1]. Arkham data supports the assertion that the U.S. still holds a substantial amount of Bitcoin, providing some clarity on the situation.

Further contributing to the crypto market's downturn was the U.S. PPI data released on July 31. The year-on-year PPI inflation rate rose to 3.3%, well above the expected 2.5%, while the monthly PPI came in at 0.9%—also higher than the 0.2% forecast [1]. These figures add to concerns about inflationary pressures, potentially influencing the Federal Reserve to reconsider the timing and magnitude of its rate cuts at the upcoming September FOMC meeting.

Prior to the PPI release, CME Fedwatch data had indicated a 99% probability of a 25-basis-point rate cut in September. However, this has since dropped to approximately 93% [1]. While the Fed is still expected to cut rates, the rise in inflation signals a more cautious monetary policy outlook, which could limit investor appetite for high-risk assets like Bitcoin and Ethereum.

Taken together, these developments have fueled a wave of selling pressure in the crypto market, with investors reassessing risk exposure amid uncertain regulatory and macroeconomic conditions. The market is now closely watching for further policy signals and economic indicators that could influence the trajectory of digital asset prices.

Source: [1] Here’s Why Bitcoin And Ethereum Prices Are Crashing — https://www.newsbtc.com/news/bitcoin/bitcoin-and-ethereum-crashing/