The Bitcoin and Ethereum -prices have crashed considerably in the last 24 hours. This follows developments on the macro end, which have fueled a bearish sentiment among investors, which leads to a wave of sale.
Why Crash the prices of Bitcoin and Ethereum
Coinmarketcap -Data Show that the prices of Bitcoin and Ethereum deposit in the last 24 hours, respectively by more than 3% and 2%. This crash is partly thanks to the statement of the US Minister of Finance Scott Bessent about the proposed Strategic Bitcoin -Reserve. In one Fox Business InterviewHe said the country will not buy a bitcoin.
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Bessent, however, added that they have no plans to sell the Bitcoin they currently have, which he claimed is worth between $ 15 and $ 20 billion. Instead of buying, the US government is planning to use only confiscated assets and to choose it against their sale. Investors considered Bears Declaration as Bearish, given that Donald Trump’s Executive Order Setting up the strategic reserve said that the US would consider buying more bitcoin.
Moreover, the Bessent statement had also suggested that the American congress would not continue Senator Cynthia’s Bitcoin Act. This bill suggests that the country will buy 1 million BTC in five years. The market has become the prices in the possibility that this happens, given its bullish implications for the Bitcoin price and the Ethereum price by expansion.
However, a positive for the prices of Bitcoin and Ethereum is the fact that the statement of Bessent about the current value of the American BTC Holdings shows that they have not sold their coins. There were reports earlier Had sold the US A significant part of his Bitcoin companies after the American Marshals said they only had 28,988,356 BTC in response to a Foia request. Arkham -data show that the US has 198,022 BTC, worth around $ 23 billion.
American PPI data contribute to crash
The American PPI data That was released yesterday, also contributed to the Bitcoin and Ethereum -Prijscrash. Data from the labor department Showed that PPI inflation in July rose to 3.3% on an annual basis (yoj), which was far above the expectations of 2.5%. In the meantime, the monthly PPI came to 0.9%, also far above the expected 0.2%.
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Bitcoin and Ethereum had witnessed a sharp decrease after the release of the data. The PPI data is Bearish for Crypto prices because the Fed recurrent the acceleration percentages During the FOMC meeting of September. Before the PPI release, Cme fedwatch data Had shown that there was a 99% chance that the FED would make a 25 -base point in September.
However, these opportunities have fallen to around 93%. Although this suggests that the FED will still lower the rates, rising inflation in the US is not good for bitcoin and ethereum prices, because it can limit how many investors can invest in these risk assets.
Featured image of Istock, graph of TradingView.com