Crypto Market Drops $133B on US PPI Surge and No New Bitcoin Purchases
Crypto market cap fell by $133 billion to $3.98 trillion after the US Producer Price Index showed a three-year high in inflation. The data dashed hopes for early Fed rate cuts and prompted a sharp sell-off. Treasury Secretary Scott Bessent added pressure by confirming no new purchases for the US strategic Bitcoin reserve. Major cryptocurrencies slid: Bitcoin from $124,474 to $118,134; Ethereum from near $5,000 to $4,559; Solana from above $201 to $191; and XRP to $3.09. The crypto market downturn triggered over $1 billion in liquidations, the largest since early August. Traders are now reassessing market stability amid rising inflation and tightening fiscal policy.
Bearish
The news combines rising US inflation—evidenced by the PPI’s three-year high—and a clear signal that the government will not buy more Bitcoin for its reserve. Higher inflation readings reduce the likelihood of Fed rate cuts, increasing risk-off sentiment in the crypto market. Scott Bessent’s statement removed a potential source of institutional demand. The result was over $1 billion in liquidations, the largest since early August, reflecting sharp short-term pressure. Historically, similar inflation surprises and Fed hawkishness have led to sell-offs in risk assets. In the long term, sustained inflation and tighter fiscal policy may keep crypto markets under pressure until clearer signals of monetary easing emerge.