Bitcoin plunges after US inflation data beats forecasts

Bitcoin fell more than 3% on August 14 from a record high hit the day before, after higher-than-expected US inflation data undermined expectations of a sharp interest rate cut by the US Federal Reserve in September 2025.

The move was also influenced by Treasury Secretary Scott Bessent's statement that the US government will not buy bitcoin to add to its strategic reserves.

Previously, on August 13, bitcoin hit a new record high, surpassing $123,500, thanks to expectations that the Fed would soon loosen monetary policy and strong buying activity from businesses.

However, this increase quickly slowed down when the producer price index (PPI) for July 2025 was announced to be much higher than forecast.

Speaking on Fox Business, Secretary Bessent said the amount of bitcoin in the US reserve is currently worth about $15-20 billion at market prices.

“We have entered the 21st century with the formation of a strategic reserve of bitcoin. We will not buy more, but will use the seized assets to continue to increase this holding,” he emphasized.

Expectations of a Fed rate cut and a wave of large-scale corporate buying have been the main drivers of bitcoin’s surge since early 2025. The digital currency has gained 25% since the start of the year and is now up about 57% from its April 2025 low.

Inflows into spot bitcoin exchange-traded funds (ETFs) and increased purchases of bitcoin by public companies — following the model of MicroStrategy (MSTR) — have also contributed significantly to the rally. Analysts say the Trump administration’s crypto-friendly stance is a key support.

Last week, President Donald Trump signed an executive order directing the U.S. Department of Labor to study the possibility of allowing 401(k) retirement funds to invest in digital currencies and other alternative assets. The order is expected to significantly expand access to the cryptocurrency market for individual investors.

The bitcoin price increase comes as US stocks continue to hit new highs, thanks to expectations that the Fed will cut interest rates in September 2025 and that Trump's nominee for the next Fed chair is likely to support a loose monetary policy.

Along with bitcoin, the price of ethereum - the world's second largest cryptocurrency by capitalization - also fell more than 3% on August 14, after approaching a record high.

Wall Street investors are increasingly interested in ethereum, as many companies add the asset to their balance sheets, seeing it as a way to access the technological infrastructure behind decentralized finance (DeFi) and other digital assets, including stablecoins - cryptocurrencies pegged to fiat currencies like the US dollar or euro to stabilize their value./.

(Vietnam News Agency/Vietnam+)

Source: https://www.vietnamplus.vn/bitcoin-lao-doc-sau-khi-so-lieu-lam-phat-my-tang-vuot-du-bao-post1055927.vnp