Bitcoin price today: pulls back on PPI report after hitting record high over $124k

Updates price levels, adds Ether and other cryptocurrencies. 

Investing.com--  Bitcoin hit a record high on Thursday, surpassing $124,400 for the first time ever, but then retreated sharply after a new producer price index (PPI) data rekindled inflation fears. 

The early surge in the world’s largest crypto asset was underpinned by growing expectations of a September interest rate cut and optimism over more corporate buying. 

World no.2 crypto Ether also advanced early on Thursday and was in spitting distance of a 2021 record high, before retreating on the PPI report. 

Ether was also boosted by a slew of corporate buying this week, as more companies adopted a Bitcoin treasury strategy popularized by Michael Saylor’s MicroStrategy. 

Bitcoin hit a record high of $124,457, before trimming gains to trade down 2.6% at $118,250 by 09:39 ET (13:39 GMT). 

“Digital asset treasuries (DATs) have been a top contributor to BTC and ETH’s strong price action”, Stan Low, Operations and Research at Grvt, told Investing.com, referring to publicly listed firms that hold large crypto reserves.

He stresses that “monitoring its share volumes and prices is crucial” because rising demand can feed on itself, pushing valuations higher.

But “this upward reflexivity can equally reverse”, he cautions, comparing the risk to investment trusts in the 1920s, when demand, perceived scarcity, or leveraged financial structures eventually broke.

PPI data surge rekindles inflation fears3rd party Ad. Not an offer or recommendation by Investing.com. See disclosure here or remove ads.

U.S. inflation worries flared up again on Thursday, sending risk assets, including cryptocurrencies, sharply lower.

The July Producer Price Index jumped 0.9%, well above expectations for a 0.2% gain and compared with no change in June. On an annual basis, PPI rose 3.3%, beating forecasts for 2.5% and accelerating from 2.4% the prior month.

Excluding food and energy, core PPI also advanced 0.9% in July, far exceeding the 0.2% forecast after holding flat in June. Core PPI was up 3.7% from a year earlier, versus expectations for 2.9% and June’s 2.6%.

Labor market figures offered little reassurance. Initial jobless claims for the week ending Aug. 9 came in at 224,000, slightly under the 228,000 consensus, while continuing claims stayed at 1.95 million.

The combination of strong wholesale price gains and resilient employment data fueled expectations that the Federal Reserve will keep rates higher for longer to contain inflation pressures.

CME FedWatch data showed the probability of a September rate cut easing to 96% from a full 100% before the latest reports.

Bitcoin recently boosted by rate cut cheer, corporate interest

The world’s biggest crypto has been on a tear since last week, aided by increased corporate buying, and as mild U.S. inflation data ramped up bets for a September rate cut. Markets were seen pricing in a nearly 97% chance for a 25 basis point cut in September, CME Fedwatch showed.

Lower rates stand to support crypto prices by freeing up more liquidity for investing in speculative assets. 

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Bitcoin was also buoyed by increased corporate buying in recent weeks, amid more companies adopting a treasury strategy popularized by Michael Saylor’s MicroStrategy Incorporated (NASDAQ:MSTR) (now Strategy). 

Metaplanet Inc (TYO:3350), the world’s sixth-largest corporate holder of Bitcoin, disclosed the purchase of over $60 million Bitcoin earlier this week. The company is raising billions in fresh capital to buy more Bitcoin.

Earlier in August, Strategy also disclosed a major Bitcoin purchase, bringing its total holdings to 628,946 coins. 

Sentiment towards crypto was also boosted this week by Peter Thiel-backed crypto exchange Bullish Inc (NYSE:BLSH) staging a stellar debut on the NYSE. Shares of the firm jumped nearly 90% from their initial public offering pricing, pricing the company at over $10 billion. 

Crypto price today: Ether, altcoins pull back after PPI 

Broader crypto prices all advanced in early Thursday trading and were sitting on strong gains this week amid improving risk appetite. However, most major altcoins retreated following the new PPI data. 

Before the pullback, world no.2 crypto Ether traded less than $100 below a record high on Thursday, having also benefited from increased corporate buying in recent weeks.

Ether rose nearly 4% to as high as $4.786.54–  close to a $4,868.8 record high hit in November 2021. The biggest altcoin then retreated by nearly 3% to $4,546.86.

A host of U.S.-listed companies announced plans to purchase Ether in a manner similar to Strategy’s buying of Bitcoin. This trend saw Standard Chartered sharply hike its price target 2025 for Ether to $7,500 from $4,000. 

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In other altcoins, world no.3 crypto XRP plunged 6% to $3.09.

Solana fell 4.7% while Cardano added 4.3%, respectively. The latter was also encouraged by Grayscale Investments advancing its listing plans for a spot Cardano exchange-traded fund. 

Among memecoins, Dogecoin dipped 8.4%, while $TRUMP lost over 5%. 

(Additional reporting by Vahid Karaahmetovic.)

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