Bitcoin dropped to around US$115,500 and ether fell to US$4,329 on August 17, 2025, evening after recent US macroeconomic data dampened expectations for a Federal Reserve rate cut in September.

The Block reported that bitcoin slipped 2% over the past 24 hours, reaching a low of US$115,046, while ether declined 3.3%.

Bitcoin is now down 7.5% from its record high of about US$124,350 set last August 17, 2025.

Analysts say higher-than-expected US inflation data has reduced the likelihood of rate cuts, strengthened the US dollar, and led investors to avoid riskier assets.

The earlier rally in bitcoin, driven by lower-than-expected consumer price index figures, ended when producer price index data showed a 3.3% year-on-year rise for July.

Investor sentiment was further affected when US Treasury Secretary Scott said the government will not purchase bitcoin for its reserves, but will explore a more “budget-neutral” way to expand the reserve.

CoinMarketCap’s fear and greed index currently reads 56, suggesting a neutral outlook among cryptocurrency investors.

Analysts are watching the upcoming Jackson Hole meeting and jobless claims data as possible market movers.

🔗 Source: The Block

🧠 Food for thought

1️⃣ Bitcoin’s correlation with traditional markets challenges its inflation hedge reputation

The weekend’s price action demonstrates how Bitcoin increasingly moves like a traditional risk asset rather than an inflation hedge.

Bitcoin fell alongside other risk assets when the July Producer Price Index came in at 3.3% year-over-year, higher than expected, which typically signals potential dollar strength and reduced appetite for speculative investments 1.

This behavior raises questions about Bitcoin’s original positioning as “digital gold” that should benefit from inflation concerns.

Research from Fidelity highlights that Bitcoin’s price has become more correlated with traditional asset classes like stock market indices, complicating its role as an effective inflation hedge 2.

The current market reaction shows this correlation in action. Instead of rising as inflation fears mount, Bitcoin fell 7.5% from its recent all-time high, behaving more like a growth stock than a store of value.