Bitcoin Tumbles Below $77,000 as US PPI Beats Expectations, Rate Hike Fears Reignite

Cryptocurrency markets plummeted on September 11 as the US August PPI rose 5.4% year-over-year, beating expectations of 5.3%. The higher-than-expected inflation rate sparked fears of a Fed rate hike, sending Bitcoin below $77,000 for the first time.

The August PPI, which measures price changes in the production process before they reach consumers, was higher than July's revised 4.8% and exceeded expectations. Core PPI, excluding food and energy, rose to 4.6% year-over-year. As a result, the market's expected probability of a 25-basis-point rate hike at the Fed's September FOMC meeting jumped above 70%, according to the CME FedWatch tool.

The dual stimuli of PPI inflation concerns and crude oil prices surging above $100 per barrel further weighed on non-yielding and high-risk assets, including cryptocurrencies. The US 10-year Treasury yield rose to 4.8184%, its highest level since November 2023. As a result, the cryptocurrency market experienced massive liquidations, with Bitcoin weakening further.

The upcoming CPI data will be closely watched as it could confirm sticky inflation and trigger another drop toward $70,000 or spark a short-term rebound if it shows signs of cooling.