Cryptocurrency Market Takes Hit from Geopolitical Uncertainty

The cryptocurrency market is experiencing a downturn on August 13 due to renewed geopolitical uncertainty. Bitcoin (BTC) has fallen below $64,000, while Ethereum (ETH) and other major altcoins are also in the red. However, Hyperliquid's HYPE token is bucking this trend, gaining as traders react to reports of its potential U.S. expansion.

The latest market weakness comes despite July's U.S. inflation rate coming in at 3.4%, which has reduced expectations for another Federal Reserve rate hike in September. The probability of a September hike now stands at around 33%. Lower interest rates can make risk assets like cryptocurrencies more attractive, but this potential tailwind is not enough to lift the market today.

Institutional demand remains weak, with Bitcoin ETFs recording approximately $61 million in outflows on August 12. Investors are also waiting for the latest U.S. initial jobless claims data, which could influence rate expectations if the labor-market data comes in significantly above or below forecasts.