Bitcoin backs off record high under pressure from US inflation data

Bitcoin prices fell on Friday after hitting record highs above $124,000 in the previous session, as higher-than-expected US producer price inflation dented hopes for a sharp Federal Reserve rate cut next month.

The world’s largest cryptocurrency was last down 2.2% at $119,112.5 at 02:04 a.m. Eastern Time (06:04 GMT). It had surged in the previous session to an all-time high of $124,436.8, but dropped sharply following the release of the producer price index data.

Ethereum, the second-largest cryptocurrency, also fell after touching record levels in the previous session.

Investors reassess rate-cut bets after inflation data

US Labor Department data on Thursday showed producer prices rose 0.9% month-on-month in July — the biggest increase since June 2022 and far above analysts’ expectations of a 0.2% rise.

This upside surprise reignited inflation fears and reduced the odds of a large September rate cut by the Fed.

Money markets trimmed bets on a 50-basis-point cut in September, shifting toward a 25-basis-point move, with traders assigning roughly a 90% probability to such a step after the PPI data.

This adjustment in expectations helped push the US dollar higher, weighing on risk assets, including cryptocurrencies.

Crypto markets had rallied earlier in the week on the back of softer-than-expected consumer inflation data, renewed institutional participation, and momentum from political developments seen as supportive for digital assets.

Trump-backed crypto firm seeks acquisitions in Asia

The Financial Times reported on Friday, citing people familiar with the matter, that “American Bitcoin” — a US crypto mining company backed by Donald Trump Jr. and Eric Trump — is seeking acquisitions in Asia to build Bitcoin reserves, following a strategy similar to Michael Saylor’s.

The report said the company is targeting the purchase of a listed firm in Japan and possibly in Hong Kong to consolidate cryptocurrencies. “American Bitcoin” is set to list on the stock exchange in September via a reverse merger with Gryphon Digital Mining. The firm confirmed it is exploring “viable expansion opportunities” overseas but has not made binding commitments yet.

Other cryptocurrency prices today

Most altcoins fell on Friday after sharp gains earlier in the week.

Ethereum fell 2.9% to $4,639.89 after nearing record highs in the previous session.

Ripple — the world’s third-largest cryptocurrency — dropped 4.1% to $3.13.