Bitcoin Falls 4%, Drops Below $118,000 as Altcoins Slide 10%
Bessent said the government has no plans to buy Bitcoin for the strategic reserve announced by President Donald Trump.
Quick overview
- The cryptocurrency market experienced a pullback, with Bitcoin dropping over 4% to $117,469 due to rising U.S. wholesale inflation data and Treasury Secretary comments.
- Ethereum also fell 6% to around $4,470, while altcoins like Dogecoin and Ripple saw steeper losses.
- Higher producer prices may delay Federal Reserve rate cuts, impacting risk assets including cryptocurrencies.
- Treasury Secretary Scott Bessent confirmed that the government will not purchase Bitcoin but will retain seized assets for the U.S. Strategic Bitcoin Reserve.
The cryptocurrency market pulled back over the past 24 hours, pressured by hotter-than-expected U.S. wholesale inflation data and comments from Treasury Secretary Scott Bessent ruling out government purchases of Bitcoin (BTC). The leading cryptocurrency fell more than 4% to $117,469.
Ethereum (ETH) also retreated from its recent record highs. After nearing $4,800, it slipped 6% to around $4,470. Altcoins saw steeper losses, with memecoin Dogecoin (DOGE) down 10%, Ripple (XRP) off 6.8%, Solana (SOL) down 5.8%, TRON (TRX) down 2%, and Binance Coin (BNB) down 2%. Bucking the trend, Cardano (ADA) edged up 0.1%.
Rate-Cut Expectations in Focus
While recent July inflation and jobs data had strengthened expectations for a Federal Reserve rate-cut cycle beginning in September, Thursday’s data showed producer prices rose 0.9% month-over-month—far above the 0.2% forecast. The Producer Price Index (PPI) measures changes in the prices businesses pay to produce goods and services.
Higher producer costs often feed into consumer inflation, potentially discouraging the Fed from cutting rates soon—a scenario that can weigh on risk assets such as stocks and cryptocurrencies.
U.S. Treasury Rules Out Bitcoin Purchases
Separately, Bessent said the government has no plans to buy Bitcoin for the strategic reserve announced by President Donald Trump. In an interview Thursday, he stated the government will retain, rather than sell, Bitcoin it has seized, and that future confiscations could add to the reserve—though no direct market purchases will be made.
“We’re not going to buy. We’re going to use seized assets and keep accumulating. We’re going to stop selling it,” Bessent said. He estimated the current holdings—largely from law enforcement seizures—are worth between $15 billion and $20 billion.
The U.S. Strategic Bitcoin Reserve was established in March under the Trump administration alongside the creation of a Presidential Working Group on Digital Assets, tasked with developing a federal regulatory framework and evaluating the formation of a national digital asset reserve.
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