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Bitcoin experienced a sharp decline on Tuesday, reversing much of its weekend gains as risk appetite waned in anticipation of key U.S. inflation data. The drop in Bitcoin prices largely offset optimism stemming from favorable regulatory developments in the United States.
Bitcoin fell 2.8% to $118,630.4 by 01:31 ET (05:31 GMT), as the broader crypto market also stalled after recording strong gains late last week. Despite buying action from Metaplanet, the sixth-largest corporate holder of Bitcoin, prices failed to gain momentum.
Bitcoin and Crypto Retreat Ahead of CPI Report
The losses in Bitcoin and other cryptocurrencies came amid a broader decline in risk-driven assets, as traders moved to reduce exposure ahead of the release of the U.S. consumer price index (CPI) inflation data, expected later on Tuesday. Inflation for July is forecast to show a slight increase, which could have implications for market expectations.
Higher-than-expected inflation could undermine recent bets on a Federal Reserve interest rate cut in September, potentially leading to tighter financial conditions and less favorable market liquidity for speculative investments, including cryptocurrencies.
Investors are also keen to see if U.S. President Donald Trump’s tariffs have contributed to higher inflation, with August’s inflation print likely to provide further insights into this factor.
Metaplanet Expands Bitcoin Holdings
Despite the broader market retreat, Metaplanet Inc. disclosed the purchase of an additional 518 Bitcoins, bringing its total holdings to 118,113 coins. The company spent $61.4 million on the acquisition, purchasing at an average price of $118,519 per Bitcoin.
Metaplanet’s purchase follows its plan to raise $3.7 billion through a stock offering, with the bulk of the funds aimed at expanding its Bitcoin holdings. The company now holds approximately $1.85 billion worth of Bitcoin, aligning with a strategy similar to that of MicroStrategy, which has used equity issuances to fund its own Bitcoin purchases.
Altcoins Stagnate After Strong Gains
The broader cryptocurrency market saw similar declines, with altcoins also retreating after recent gains. Ether, the second-largest cryptocurrency, fell 0.6% to $4,281.12, pulling back from near-record highs reached in 2021. XRP dropped 4.1% to $3.1360, while Solana and Cardano lost between 5.5% and 6%.
Among meme coins, Dogecoin dropped 6.3%, while the $TRUMP token shed 5.2%, reflecting the overall downturn in market sentiment.
