Bitcoin Plunges Below $77K Amid Surge in Fed Hike Odds
Bitcoin dipped below $77,000 on Thursday as investors bet heavily on another interest-rate hike from the Federal Reserve. The cryptocurrency fell to an intraday low of approximately $76,748 after the release of hot inflation data.
The Producer Price Index showed wholesale inflation rose 5.4% year over year in August, slightly above the 5.3% consensus estimate. This sent traders scrambling to increase their bets on a rate hike, with the CME FedWatch tool showing the probability climbing to roughly 70%, up from around 64% beforehand.
The odds of a September hike also jumped after the hot PPI print, reaching approximately 74%. A further surge in inflation expectations could cement this outcome. The upcoming Consumer Price Index report will be closely watched for confirmation, with markets expecting headline inflation to rise by around 0.4% in August.
The Federal Reserve's monetary policy decisions are closely tied to Bitcoin's price movement. Surging oil prices have also reignited inflation fears and added pressure on the cryptocurrency, as Treasury yields climb towards their highest levels since 2023.