A stronger-than-anticipated inflation reading reminded investors that Bitcoin remains a highly volatile asset just hours after the digital currency soared to another record high. <\/p>\n
The original cryptocurrency fell more than 4% in the minutes after a government report showed US wholesale inflation accelerated in July by the most in three years. <\/p>\n
That sent stocks lower and tempered expectations for a reduction in interest rates, sending Bitcoin down from a high of $124,515 set late Wednesday in New York. The previous record was reached in July. <\/p>\n
Helping to fuel the shift in sentiment were comments from Treasury Secretary Scott Bessent on Fox Business that the US would not be buying additional Bitcoin for President Donald Trump\u2019s crypto strategic reserve. Bitcoin was trading at about $118,100 as of 3:06 p.m. in New York. <\/p>\n
Bitcoin has been steadily rising for most of the past year as a result of the friendly legislative climate in Washington ushered in by Trump. Public companies, led by Michael Saylor\u2019s Strategy, have boosted the demand by following an increasingly popular corporate tactic of stockpiling the original cryptocurrency. The playbook has recently spread to smaller competitors, like Ether, leading to a broad rise across digital assets. <\/p>\n
Still, the retreat was quick Thursday. Leveraged bets on digital assets saw over $1 billion liquidations in the past 24 hours with $770 million and $269 million in long and short positions respectively, according to data complied by Coinglass. <\/p>\n
\u201cThe recent pullback in crypto prices following a hotter-than-forecast reading on core PPI seems to have shaken broader confidence in a Fed rate cut next month,\u201d said Thomas Perfumo, global economist at Kraken. \u201cFundamentally, elevated inflation continues to underscore the long\u2011term appeal of crypto assets with fixed or programmatic supply, which are structurally better positioned to preserve, and even grow in value.\u201d<\/p>\n
The recent coordinated move between stocks and Bitcoin underscores how speculative market corners and mainstream benchmarks are drawing from the same well of optimism. Earlier this week, US inflation data landed in line with expectations this week \u2014 and strengthened bets the Federal Reserve will cut interest rates in September, easing financial conditions and encouraging capital to flow from blue-chip equities to volatile digital tokens. Traders pared those bets Thursday. <\/p>\n
While Trump\u2019s January executive order did say that the government will acquire more Bitcoin via \u201cbudget neutral\u201d strategies, many crypto bulls assumed this would actually involve buying more tokens, not just getting them through confiscations in criminal cases. Some even speculated that the US would revalue its gold reserve and use that to buy more tokens. Bessent threw cold water on that idea. <\/p>\n
\u201cWe\u2019re not going to be buying that, but are going to use confiscated assets and continue to build that up. We\u2019re going to stop selling that,\u201d Bessent said on \u201cMornings with Maria\u201d on Fox. \u201cYou know, I believe that the Bitcoin reserve at today\u2019s prices is somewhere between $15 and $20 billion.\u201d<\/p>\n
Bitcoin\u2019s market cap rose to around $2.5 trillion and Ether\u2019s to nearly $575 billion when prices peaked, according to CoinGecko. Ether was trading just below its almost four-year old record on Thursday, changing hands at around the $4,600 level. <\/p>\n
Ether\u2019s rise has been propelled by sustained demand from newly active treasury firms, while Bitcoin\u2019s steadier climb has leaned on persistent exchange-traded inflows even as it has faced technical resistance. However, the second largest token has seen most of the liquidations in leveraged bets amid the sharp drawdown. <\/p>\n
\u201cCrypto has been positively correlated to equities with the relationship stronger for ETH than BTC,\u201d said Chris Newhouse, director of research at Ergonia. \u201cGeneral sentiment looks positive.\u201d <\/p>\n
Pan and Kharif write for Bloomberg.<\/p>\n","protected":false},"excerpt":{"rendered":"A stronger-than-anticipated inflation reading reminded investors that Bitcoin remains a highly volatile asset just hours after the digital…\n","protected":false},"author":2,"featured_media":83005,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[37],"tags":[47133,931,57883,57886,28,50198,26968,9569,3747,112,2005,57885,17164,8620,3479,57884,1975],"class_list":["post-83004","post","type-post","status-publish","format-standard","has-post-thumbnail","category-markets","tag-bet","tag-bitcoin","tag-bitcoin-retreat","tag-blue-chip-equity","tag-business","tag-ether","tag-expectation","tag-interest-rate","tag-market","tag-markets","tag-new-york","tag-quick-thursday","tag-record","tag-strategy","tag-trump","tag-us-wholesale-inflation","tag-week"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/posts\/83004","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/comments?post=83004"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/posts\/83004\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/media\/83005"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/media?parent=83004"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/categories?post=83004"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/tags?post=83004"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}