From a peak of over $4.02 trillion, the overall cryptocurrency market has witnessed a significant decline, dropping to approximately $3.98 trillion after a drastic price fall. This downturn has resulted in a staggering loss of $133 billion within a 24-hour period, triggered by recent comments from US Treasury Secretary Scott Bessent and the release of US Producer Price Index (PPI) data.
### BTC, ETH, XRP, and Others Face a Downturn
The US PPI data, which recently showed its steepest increase in three years, has raised concerns about rising inflation driven by escalating costs of goods and services. This development poses a challenge for the Federal Reserve, which may need to reconsider its interest rate strategy. The unexpected rise in the PPI figures has unsettled investors, leading to a notable decline in the cryptocurrency market as fears of inflation dampen expectations for potential interest rate cuts by the Federal Reserve in September. The crypto market’s loss of $133 billion reflects the largest liquidation event since early August, pushing the total market capitalization down to $3.98 trillion shortly after traders began taking profits from Bitcoin’s remarkable price surge.
Bitcoin, which reached an all-time high of $124,474, has since fallen to approximately $118,133.73. This decline is not isolated to Bitcoin, as other cryptocurrencies have also experienced downturns. Ethereum, which was nearing the $5,000 mark, has fallen to $4,558.81. Ripple’s XRP has slipped by 0.44%, now trading at $3.09, while Solana has decreased by 2%, dropping from above $201 to around $191.01. The CoinDesk 20 Index, which tracks the largest cryptocurrencies, has also declined by 2.1% over the past day. These price movements have led to extensive liquidations, with over $1 billion in leveraged positions being erased in just 24 hours. Long traders were particularly affected by this wave of liquidations.
### US Treasury Secretary Says Government Is Not Buying More Bitcoin
Scott Bessent, a former hedge fund manager and current US Treasury Secretary, has made comments that appear to have contributed to the Bitcoin market’s decline. In a recent interview with Fox Business, Bessent clarified that the US government does not intend to acquire additional Bitcoin for its strategic reserves or for any separate digital asset holdings. He stated, “We’re not going to be buying that, but we are going to use confiscated assets and continue to build that up.” The current valuation of the US Bitcoin reserve, based on a price of around $120,000, is estimated to be between $15 billion and $20 billion. Following his remarks, Bitcoin’s price saw a rapid drop. Although Bessent later expressed a more optimistic view of Bitcoin in a follow-up post, the market has yet to rebound from the immediate selloff. The Bitcoin that has been seized by the federal government will contribute to the Strategic Bitcoin Reserve established by a previous executive order from President Trump.
### Disclaimer
Coinspeaker is dedicated to providing impartial and transparent news coverage. This article aims to furnish accurate and timely information, but it should not be construed as financial or investment advice. Given the volatile nature of the market, readers are encouraged to independently verify the information and consult with financial professionals before making any investment decisions based on this content.
