New york: Bitcoin traded lower on Friday, tumbling to $119,112.5 from its record-breaking high of $124,436.8 in the previous session. The decline was primarily driven by the release of unexpectedly strong U.S. producer price index (PPI) data, which diminished the likelihood of aggressive monetary easing by the Federal Reserve next month.
According to Azeri-Press News Agency, the world’s largest cryptocurrency saw a 2.2% decrease as of 02:04 ET (06:04 GMT), after reaching unprecedented highs. The pullback followed the release of the PPI data, which indicated a 0.9% month-on-month rise in July, surpassing economists’ forecasts of a 0.2% increase. This surprise in inflation figures has rekindled concerns and adjusted expectations for the Federal Reserve’s potential rate cut in September.
The stronger-than-expected PPI data has led money markets to lower their bets on a 50-basis-point cut and to favor a quarter-point move instead. Traders now assign a 90% probability to a 25 basis point cut after the release of the PPI figures. This shift has also bolstered the U.S. dollar, putting additional pressure on risk assets, including cryptocurrencies.
In recent days, the crypto market had experienced a surge, buoyed by a soft consumer inflation report and renewed institutional interest, alongside supportive policy developments. However, the latest PPI data has prompted a reassessment of these trends.
Additionally, the Financial Times reported that American Bitcoin, a U.S. cryptocurrency miner backed by Donald Trump Jr. and Eric Trump, is actively seeking acquisitions in Asia to bolster its bitcoin reserves. The firm is exploring potential purchases in Japan and Hong Kong, echoing Michael Saylor’s strategy model, although no binding commitments have been made yet.
In line with Bitcoin’s decline, most altcoins also fell on Friday. Ethereum, the world’s second-largest cryptocurrency, decreased by 2.9% to $4,639.89, while XRP, the third-largest, dropped 4.1% to $3.13. Other digital currencies such as Solana, Cardano, and Polygon saw declines of 5.1%, over 6%, and 5.5%, respectively. Among meme tokens, Dogecoin fell 7%, and $TRUMP retreated by 5.6%.