Cryptocurrencies Bitcoin and Ether experienced significant price declines on August 14, 2025, following the release of the July U.S. Producer Price Index (PPI). The PPI indicated a higher-than-anticipated increase in inflation, reigniting concerns about the Federal Reserve's monetary policy and leading to a broader risk-off sentiment in financial markets.
Bitcoin fell approximately 4% from its intraday high of $124,480 to around $118,000. Ether also retreated from its intraday peak of $4,788. The July PPI report showed a 0.9% rise in producer prices month-over-month, significantly exceeding the projected 0.2% increase. Annually, the PPI climbed to 3.3%, an acceleration from June's 2.4% figure. A notable contributor to this inflationary pressure was a 38.9% surge in the prices of fresh and dry vegetables from June to July. This data contributed to a strengthening U.S. dollar and a rise in 10-year U.S. Treasury yields, which increased by five basis points to 4.25%. U.S. stock index futures also saw a decline of 0.5%.
Experts suggest that the spike in vegetable prices could lead to higher grocery costs for consumers. The market's reaction highlights investor caution regarding persistent or accelerating inflation and its potential impact on Federal Reserve interest rate decisions. The data has introduced uncertainty regarding the timing and extent of anticipated rate cuts, prompting a reassessment of investment strategies across various asset classes, including digital currencies.