Bitcoin Plunges 8% as Inflation Fears Rattle Crypto Market

On August 18, 2025, the cryptocurrency market experienced a significant downturn as Bitcoin continued its slide from the record highs set just a few days earlier. The leading digital asset fell as low as $114,700, a nearly 8% decline from its previous peak.

The sell-off was largely driven by investor reaction to last week's hotter-than-expected inflation data in the United States. The U.S. Producer Price Index, a key measure of wholesale inflation, rose 0.9% in June, triple the pace that economists had anticipated. This sparked concerns that the Federal Reserve may be less inclined to cut interest rates at its upcoming September meeting, a move that would typically benefit riskier assets like Bitcoin.

The broader crypto market also felt the impact, with Ether sliding more than 8% over the past week to $4,337. The combined value of all digital assets fell below the $4 trillion benchmark, according to CoinMarketCap.

Adding to the bearish sentiment, the U.S. government confirmed last week that it would not be joining the growing number of companies and institutions accumulating Bitcoin. Treasury Secretary Scott Bessent stated that the government would not be purchasing the cryptocurrency for a proposed strategic reserve, dashing the hopes of some investors who had anticipated such a move.

As the crypto community looks ahead, all eyes will be on the Federal Reserve's annual economic symposium in Jackson Hole, Wyoming, this week, where policymakers may provide further clues about the central bank's future monetary policy decisions. Additionally, Thursday's U.S. jobless claims data will be closely watched for insights into the strength of the economy.