Reasons Behind the Plummeting Prices of Bitcoin and Ethereum
In July 2025, the cryptocurrency market experienced a significant downturn, with both Bitcoin and Ethereum prices taking a hit. The crash was primarily driven by several key factors, including institutional selloffs, declining ETF inflows, and the Federal Reserve's hawkish tone delaying interest rate cuts.
Institutional selloffs, notably Galaxy Digital’s $9.5 billion BTC transfers, played a significant role in the Bitcoin price crash. Ethereum, however, showed resilience during this period and even recorded gains, supported partly by institutional inflows, such as BlackRock’s Ethereum ETF fund.
The Federal Reserve’s hawkish stance, which delayed interest rate cuts, likely reflected concerns about inflation data, including the U.S. Producer Price Index (PPI), which affects market liquidity and risk appetite. While none of the specific search results explicitly connect the July 2025 PPI release to the crypto crash, macroeconomic indicators like PPI often influence Federal Reserve policy expectations.
U.S. Treasury Secretary Scott Bessent's statement about the proposed Strategic Bitcoin Reserve may have contributed to the crash. Although not directly referenced in the search results, his bearish or cautious commentary on macroeconomic conditions or crypto valuations could have reinforced market fears and accelerated selling among institutional investors, amplifying the downturn.
The proposed Bitcoin Act was not directly mentioned in the search results as a cause for the July crash. However, generally, regulatory developments around cryptocurrency such as proposed legislation can increase uncertainty and negatively impact prices when investors fear restrictive measures or unfavorable regulatory outcomes. If proposed U.S. legislation created apprehension, it would contribute to overall bearish sentiment, although no direct info was found to support this.
In a Fox Business Interview, Secretary Bessent stated that the country will not be buying Bitcoin. He also clarified that the U.S. government has no plans to sell the Bitcoin they currently hold, which is worth between $15 and $20 billion. This decision not to sell could potentially stabilise the Bitcoin market.
Yesterday's U.S. PPI data contributed to the Bitcoin and Ethereum price crash, as it increased concerns about inflation and the Federal Reserve's potential reconsideration of cutting rates at the September FOMC meeting. This could restrain how much investors can invest in Bitcoin and Ethereum.
In summary, the July 2025 Bitcoin and Ethereum price crash was triggered mainly by institutional BTC selloffs, declining ETF inflows, and the Federal Reserve’s hawkish tone delaying interest rate cuts. Ethereum remained relatively strong owing to institutional demand and technological optimism. The U.S. PPI data likely influenced Fed policy expectations, adding macroeconomic pressure that contributed to the crypto selloff, though no direct causal link was cited. Scott Bessent’s statements probably played a role by reinforcing bearish sentiment but are not explicitly detailed in the provided information. The proposed Bitcoin Act’s role remains unclear from the available data but could have heightened regulatory concerns among investors.
- Institutional selloffs, such as Galaxy Digital's vast Bitcoin transfers, significantly contributed to the Bitcoin price crash in July 2025.
- However, Ethereum showed resilience during this period, even recording gains, partially due to institutional inflows like BlackRock’s Ethereum ETF fund.
- The Federal Reserve’s hawkish stance, delaying interest rate cuts, was likely influenced by the U.S. Producer Price Index (PPI) data, which could restrain investors' abilities to invest in Bitcoin and Ethereum.
- Scott Bessent's statements, including his opposition to the proposed Strategic Bitcoin Reserve, may have reinforced bearish sentiment in the market and potentially accelerated the selling among institutional investors.
- The proposed Bitcoin Act, although not directly implicated in the July crash, could have heightened regulatory concerns among investors if it created apprehension due to potential restrictive measures or unfavorable regulatory outcomes.
