Bitcoin Falls Below $78,000 on Hotter-Than-Expected US Inflation Data

Bitcoin fell below $78,000 on August 26 after U.S. inflation data came in hotter than expected, adding pressure to risk assets and setting the stage for a key Federal Reserve policy speech. The decline followed the release of the July Personal Consumption Expenditures price index, which showed inflation running at 3.7% year-over-year, above the 3.6% forecast from economists.

The data, released by the Bureau of Economic Analysis, indicated that consumer spending grew just 0.2% in July, a notably slower pace than income growth. The inflation reading, the Federal Reserve's preferred gauge, remains nearly double the central bank's 2% target. The report dampened market sentiment that had been buoyed by an unexpected decline in June's PCE inflation, which had marked the first month-on-month decrease in six years.

Following the announcement, U.S. equities opened lower and gold dipped below $4,600 per ounce. Bitcoin experienced intraday declines of roughly 1%, extending a pullback from higher levels. The broader cryptocurrency market held relatively flat, with total market capitalization near $2.746 trillion. The move in Bitcoin aligned with a rise in the 10-year Treasury yield to...