Crypto Markets Plummet on Surging US Inflation

The crypto market took a hit on Thursday following new U.S. inflation data that shows producer prices rose 5.4% annually, higher than expected.

Economists forecasted a 0.4% increase in the Producer Price Index (PPI), but it actually increased by the same amount. However, despite some cooling of underlying price growth, inflationary pressures are still high according to the report.

The market's reaction was immediate and severe, with major cryptocurrencies experiencing significant drops. Bitcoin fell 2.7% in the last 24 hours to $77,300, while XRP dropped 3.9% to just over $1.37. Ethereum tumbled 2.1% to $2,450.

The Federal Reserve's upcoming meeting on September 15-16 is now a major focus for markets. After the PPI was released, CME FedWatch had traders pricing in a 74% chance of the Fed hiking rates to a 3.75%-4.00% range, down from 80% prior to the release.