Bitcoin News Today: Bitcoin Falls 4% as U.S. PPI Surges 0.9% MoM, Stoking Rate Hike Fears

The U.S. Producer Price Index (PPI) for July surged by 0.9% month-over-month, significantly above the estimated 0.2%, and by 3.3% year-over-year, outpacing forecasts of 2.5%. This marked a sharp acceleration from June’s 0.0% monthly growth and 2.4% annual rise [1]. Core PPI, which excludes food and energy, also rose by 0.9%, far exceeding the 0.2% expected. These figures signaled persistent inflationary pressures at the wholesale level, reigniting concerns about the Federal Reserve’s ability—or willingness—to cut interest rates in the near term [1].

In response, cryptocurrency prices fell sharply. Bitcoin dropped below $119,000 from a recent high above $124,000, while Ethereum plunged nearly 4% to $4,550. Other altcoins such as Solana and XRP also saw steep declines. The market’s rapid reaction underscored the heightened sensitivity of crypto assets to macroeconomic data and monetary policy expectations [1].

The PPI report followed mixed labor market data, with initial jobless claims at 224,000 for the week ending August 9—slightly below the 228,000 forecast—but continuing claims remaining at 1.95 million. A strong labor market, combined with rising inflation, reinforced expectations that the Fed may keep rates elevated for longer. The probability of a rate cut in September, previously at 100% according to the CME FedWatch tool, dipped to 96% after the data was released [1].

Investor sentiment shifted quickly, with U.S. stock index futures declining 0.5% and the dollar gaining strength. The yield on the 10-year U.S. Treasury bond also increased to 4.25%, reflecting growing demand for safe-haven assets amid uncertainty about the Fed’s next move [1].

The sharp sell-off in crypto assets highlights how closely digital markets are now tied to traditional economic indicators. While some investors view cryptocurrencies as a hedge against inflation, their performance remains highly dependent on central bank policy. A delay in rate cuts could increase borrowing costs and reduce liquidity, further pressuring speculative assets like crypto [1].

The market now faces a period of uncertainty as it awaits more data to determine the trajectory of inflation and the Fed’s response. Until clearer signals emerge, volatility is expected to remain elevated, particularly for crypto, which is among the most sensitive asset classes to changes in monetary policy [1].

Source: [1] Crypto Prices Quickly Slide After Troubling U.S. PPI Report (https://www.coindesk.com/markets/2025/08/14/crypto-prices-quickly-slide-after-troubling-u-s-ppi-report)