The U.S. Producer Price Index (PPI) surged to 3.3% year-over-year in July 2025, significantly exceeding market expectations of 2.5% and the previous 2.3%. Monthly PPI also jumped to 0.9% against a 0.2% forecast. Core PPI rose 3.7% annually and 0.9% monthly, both well above projections. This hotter-than-anticipated inflation data triggered an immediate downturn in cryptocurrency markets, with Bitcoin plummeting sharply from its recent record high above $124,000.
The Federal Reserve maintained a cautious monetary stance, reinforcing concerns about persistent inflation and diminishing hopes for a September rate cut—previously priced at a 95.8% probability. Bitcoin's decline catalyzed broader market volatility, prompting liquidity shifts and institutional risk reassessments. Raoul Pal, CEO of Real Vision, noted: "Hot US PPI keeps macro risk-off for now. It reaffirms the dollar bid and weighs on all risk assets, including crypto." Analysts highlighted historical parallels where similar PPI spikes preceded crypto downturns, urging close monitoring of liquidity flows amid ongoing macroeconomic pressures.