Why are Bitcoin and Ether falling? The Fed's expected rate has also dropped.

The world of cryptocurrency, led by Bitcoin and Ether, started Monday with plummets. Bitcoin fell to 115 k dollars during the night, while Ether dropped to 4275 dollars. Although there is currently no news directly affecting the drop, experts point to macroeconomic uncertainties.

“Investors are waiting cautiously”

Vincent Liu, the manager of Asia-based crypto research and institutional consultancy firm Kronos Research, cited the plummets as a reason for investors to cautiously transition to waiting:

“The inflation data announced last week, which came in higher than expected, caused investors to act much more cautiously. High inflation has also diminished hopes for a Fed rate cut in September. The number of risk-averse individuals is increasing.”

As a reminder, although the headline inflation in the consumer price index was below expectations last week, core inflation was announced at 3.1%, which was above expectations. However, the numbers that scared the markets came from the PPI. The Producer Price Index data was significantly above expectations both on a monthly and annual basis, which also lowered the expectations for the Fed’s September meeting.

In the CME Fed Watch Tool, the expectation for the Fed to cut rates by 25 basis points at its September meeting has fallen below 90%. This rate, which rose to 97% last week, is currently around 87% this morning.

Published: August 18, 2025 08:18Last Updated: August 18, 2025 08:25