Global cryptocurrency markets tumbled Thursday after new inflation data revealed wholesale prices are climbing far faster than anticipated. Bitcoin dropped 3.8% to $117,900, Ethereum fell 4% to $4,535, and Ripple plunged 6.1% to $3.07, according to CoinMarketCap.
The market reaction follows the release of the U.S. Producer Price Index (PPI) for July, which tracks the average change in prices paid to manufacturers and service providers. The PPI rose 0.9% last month the largest monthly increase since March 2022, according to the Wall Street Journal.
This 0.9% jump was three times higher than economists’ expectations, raising concerns for consumers already grappling with high prices. PPI figures often foreshadow future changes in the broader cost of living. The data also signals that the Federal Reserve is unlikely to implement short-term interest rate cuts, contrary to Wall Street’s prior expectations for September.
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Experts Express Surprise at Inflation Data
CNBC anchor Rick Santelli, a long-time supporter of former President Donald Trump’s economic policies, appeared visibly shocked while reporting the July inflation figures Thursday morning. “Headline number is whoppingly big,” Santelli remarked. “Oh my goodness. Up 9/10ths of a percent. Up 9/10ths.”
President Trump has repeatedly claimed that inflation is no longer a pressing issue, but prices have risen faster than many economists anticipated following his “Liberation Day” tariff announcement on April 2. Thursday’s unexpectedly high wholesale price figures suggest that the U.S. economy may still be grappling with tariff-driven inflation pressures.
The Consumer Price Index (CPI) for July, released Tuesday, showed a 2.7% increase year-over-year, slightly below the 2.8% expected by analysts. Core inflation which excludes the highly volatile food and energy sectors—rose 3.1% over the same period, marking the highest increase in five months. Recent polling from the Associated Press-NORC Center for Public Affairs Research indicates that roughly half of Americans consider rising grocery prices a “major stress” in their daily lives.
Political Interference and Economic Oversight
Initial jobless claims for the week of August 9 totaled 224,000, slightly below the anticipated 230,000. However, recent months’ unemployment figures have been subject to significant revisions over time—fluctuations often observed in the lead-up to a recession. These revisions have drawn scrutiny from the White House.
On August 1, former President Trump dismissed Erika McEntarfer, head of the Bureau of Labor Statistics, citing dissatisfaction with the revised employment data. Trump criticized the numbers as “rigged,” raising concerns among economists about political interference in the reporting of economic statistics a move widely interpreted as an attempt to punish those delivering unfavorable data.
Trump, who has personally benefited from cryptocurrency investments, has also pressured Federal Reserve Chair Jerome Powell to lower interest rates, but the Fed has resisted. With inflation trending upward, further rate cuts are unlikely, as reducing rates could risk exacerbating price pressures.
Wider Market Impact Beyond Bitcoin
The stock market showed mixed reactions to the inflation data. The Dow Jones Industrial Average dipped on the news but recovered by Thursday’s close. The S&P 500 also fell significantly following the PPI release, though it ultimately ended just two points higher than Wednesday’s record high— a movement CNBC described as a “pause” at the top.
Other cryptocurrencies experienced varied declines. While major players like Bitcoin and Ethereum saw steep drops, some altcoins were less affected. BNB fell 0.7%, Solana dropped 4%, TRON declined 0.6%, and Dogecoin slid 8.1%. Meanwhile, Cardano, the world’s eighth-largest cryptocurrency, rose 2.3%, bucking the broader downward trend.
Frequently Asked Questions
Why did crypto fall?
July’s PPI rose 0.9%, higher than expected, signaling persistent inflation and potential Fed rate hikes—bad news for risk assets like crypto.
Which coins dropped most?
Bitcoin (-3.8%), Ethereum (-4%), Ripple (-6.1%). Some altcoins fared better: Cardano (+2.3%), BNB (-0.7%).
What is the PPI?
The Producer Price Index tracks changes in prices paid to producers—a leading indicator of consumer inflation.
How did stocks react?
Dow dipped then recovered; S&P 500 briefly fell but closed slightly above its record.
Will interest rates rise?
High inflation increases the likelihood the Fed keeps rates elevated or raises them, limiting short-term cuts.
How does this affect consumers?
Rising wholesale prices can lead to higher costs for goods and services, especially groceries and essentials.
Is the crypto drop temporary?
Short-term volatility is likely. Sustained movements depend on inflation trends, Fed policy, and market sentiment.
Conclusion
The unexpectedly high inflation data has rattled both cryptocurrency and stock markets, highlighting ongoing economic uncertainty. While major cryptocurrencies like Bitcoin and Ethereum experienced sharp declines, some altcoins showed resilience. Investors and consumers alike are closely watching the Federal Reserve’s next moves, as interest rate decisions will play a key role in shaping market trends and the broader cost of living.