Bitcoin Gains As US PPI Comes Lower Than Expected At 4.5%

The unchanged headline PPI was driven by falling prices in goods, while goods prices increased across services and construction, the official data revealed. Final-demand goods prices declined 0.7% in July, but services prices rose 0.2%.

Prices for energy came in as another big negative contributor dropping 3.1% for the month. The overall reduction in final-demand goods was led by a 5.7% fall in gasoline prices.

Impact On Bitcoin, Crypto Market

Following the release, Bitcoin price was up 0.58% at $63,728.09. The move coincides with a likely positive response from crypto traders, as easing producer inflation may take the pressure off the Federal Reserve to keep rates restrictive.

If prices were to settle down, that could lead to more interest-rate cuts, making riskier assets more attractive. If this is true, then Bitcoin would benefit from lower rates that would make investors move more capital toward more volatile and higher yielding assets.

However, the inflation situation is not entirely positive. Prices excluding food, energy and trade services rose 0.4% in July and were 4.7% higher than they were a year earlier. So, although the new PPI was a positive sign for cryptocurrencies, the market will keep an eye on the next inflation and economic data for a global cooling trend.