Bitcoin and Ethereum Fall After US ’No Buy’ Stance and Hot PPI
The Bitcoin price slid over 3% and Ethereum price dropped 2% in the last 24 hours. This decline followed U.S. Treasury Secretary Scott Bessent’s comment that the U.S. won’t purchase Bitcoin under the proposed Strategic Bitcoin Reserve. Investors had priced in new government buys, especially after Trump’s executive order. Bessent did clarify that the government will hold onto its existing 198,022 BTC (~$23 billion) from seized assets.
Meanwhile, U.S. producer price index (PPI) inflation jumped to 3.3% YoY in July (vs 2.5% expected) and 0.9% MoM (vs 0.2% expected). These hotter-than-expected figures reduced the odds of a Fed rate cut at September’s FOMC meeting from 99% to 93%, further pressuring risk assets. Higher inflation and tighter policy hurt crypto demand. In short, the combination of bearish Treasury signals and rising PPI data triggered a sell-off, weighing on both Bitcoin price and Ethereum price.
Bearish
The news is bearish. The absence of U.S. government support for new Bitcoin purchases removes a key bullish catalyst that investors had expected after Trump’s executive order. Historical events show that government buys often boosted market sentiment. At the same time, hotter PPI data reduces the likelihood of Fed rate cuts, which historically have provided liquidity for risk assets like Bitcoin and Ethereum. The combination of weaker demand and tighter monetary policy suggests downward pressure in the near term. In the short term, traders may continue to sell on further negative macro surprises. Long term, prices could stabilize if inflation cools and the Treasury reconsiders future purchases, but current signals point to caution and potential further declines.