Reason to trust Strict editorial policy that focuses on accuracy, relevance, and impartiality Created by industry experts and meticulously reviewed The highest standards in reporting and publishing How Our News is Made Strict editorial policy that focuses on accuracy, relevance, and impartiality Ad discliamer Morbi pretium leo et nisl aliquam mollis. Quisque arcu lorem, ultricies quis pellentesque nec, ullamcorper eu odio. The Bitcoin and Ethereum priceshave crashed significantly in the last 24 hours. This follows developments on the macro end, which have sparked a bearish sentiment among investors, leading to a wave of sell-offs. Why Bitcoin and Ethereum Prices Are Crashing
CoinMarketCap datashows that the Bitcoin and Ethereum prices are crashing, down over 3% and 2%, respectively, in the last 24 hours. This crash is partly thanks to U.S. Treasury Secretary Scott Bessent’s statement about the proposed Strategic Bitcoin Reserve. In a Fox Business Interview, he said that the country won’t be buying Bitcoin. Related Reading Bitcoin Hits $124,400 ATH, Ethereum Next In Line, What’s Driving It? 1 day ago
However, Bessent added that they have no plans to sell the Bitcoin they currently hold, which he claimed is worth between $15 and $20 billion. Instead of buying, the U.S. government plans to use only confiscated assets and opt against selling them. Investors viewed Bessent’s statement as bearish, considering that Donald Trump’s executive orderestablishing the strategic reserve said the U.S. would consider ways to buy more Bitcoin.
Furthermore, Bessent’s statement had also suggested that the U.S. Congress wasn’t going to follow through with Senator Cynthia’s BITCOIN Act. This bill proposes that the country will buy 1 million BTC over five years. The market has been pricing in the possibility of this happening, given its bullish implications for the Bitcoin price and the Ethereum price by extension.
However, a positive for the Bitcoin and Ethereum prices is the fact that Bessent’s statement about the current value of the U.S. BTC holdings shows that they haven’t sold their coins. There were earlier reports that the U.S. had solda significant portion of its Bitcoin holdings after the U.S. Marshals said they held only 28,988.356 BTC in response to an FOIA request. Arkham data shows that the U.S. holds 198,022 BTC, worth around $23 billion. U.S. PPI Data Contributes To Crash
The U.S. PPI datathat was released yesterday also contributed to the Bitcoin and Ethereum price crash. Data from the Labor Departmentshowed that PPI inflation rose to 3.3% year-on-year (YoY) in July, which was way above expectations of 2.5%. Meanwhile, the monthly PPI came in at 0.9%, also way above the expected 0.2%. Related Reading Here’s Why Bitcoin And Ethereum Prices Are Crashing 8 hours ago
Bitcoin and Ethereum had witnessed a sharp drop following the release of the data. The PPI data is bearish for crypto prices because it could make the Fed reconsider cutting ratesat the September FOMC meeting. Before the PPI release, CME Fedwatch datahad shown that there was a 99% chance that the Fed would make a 25 basis point cut in September.
However, these odds have dropped to around 93%. Although this suggests that the Fed will still cut rates, rising inflation in the U.S. isn’t good for Bitcoin and Ethereum prices, since it could restrain how much investors can invest in these risk assets. BTC trading at $119,134 on the 1D chart | Source: BTCUSDT on Tradingview.com Featured image from iStock, chart from Tradingview.com