Following the release of the PPI inflation report, both the US stock market and BTC/crypto experienced a downturn yesterday. In other news, new information has emerged regarding the US's crypto reserve strategy.

Market Overview

On Thursday (August 14th, US), the stock market traded sideways after a strong rally on Wednesday. Stock futures showed mixed trends, with Dow futures rising while Nasdaq futures fell. Oil contracts remained around $63.9 per barrel. Gold held at $3380 per ounce.

Bitcoin underwent a rapid correction from its new peak of $124,000, dropping to a low of $118,000 before recovering to around $119,000. Major altcoins saw slight corrections. The overall crypto market capitalization stood at $4.1 trillion.

Over $1 billion in leveraged positions were liquidated in the past 24 hours, with half of that amount wiped out in under two hours. This swift cascade of liquidations highlights the volatility of the crypto market.

The latest PPI report for July was surprisingly high, coming in at 3.3% year-over-year (vs. the 2.5% forecast), while core PPI (excluding energy and food) reached 3.7% (vs. the 2.9% forecast). This was the highest monthly increase since March 2022. Although PPI is not directly correlated with CPI, this data raises concerns that producer inflation could spill over into consumer prices, thereby influencing monetary policy expectations. Before the report, the market predicted a 0.5% Fed rate cut in September, but after the PPI data, this probability dropped to 0%. At the time of this report, over 90% of investors predict the Fed will cut by 0.25%, while 9.4% believe rates will remain unchanged.

The stock market showed little significant reaction to this news. However, BTC saw a sharp drop yesterday. Despite this, the PPI news still creates anxiety about the Fed's willingness to cut interest rates. Concurrently, the process of selecting a new Fed Chair is still underway, with David Zervos, a candidate who favors aggressive easing, gaining significant attention.

US Building Strategic BTC Reserve from Seized Assets

US Treasury Secretary Scott Bessent stated that the US is forming a Strategic Bitcoin Reserve Fund from seized BTC, with an estimated value of $15–20 billion at current prices. The government has halted sales and has no current plans for new purchases. Additionally, the US continues to hold a large gold reserve, which is recorded at its historical 1973 price of $42 per ounce—much lower than the market price. The government has abandoned the idea of revaluing gold to use as a funding source for Bitcoin purchases.

According to Bessent, the current actions are only individual moves but could be consolidated into a national sovereign wealth fund in the future. The market expressed disappointment that the "budget-neutral" option to buy more Bitcoin was not implemented. He also hinted that further purchases would only be possible if Congress approved, as the President cannot order such a purchase via executive order.

However, Bessent later retracted his statement on Fox News and clarified on X that seized Bitcoin transferred to the government will form the foundation of a Strategic Bitcoin Reserve Fund established by President Trump via an executive order in March. The Treasury Department will continue to seek "budget-neutral" options to acquire more BTC, with the goal of expanding this fund in line with President Trump's objective of making the US the "world's Bitcoin superpower."

The Future of AI and Crypto Convergence

Coinbase recently shared a long-term vision for how artificial intelligence (AI) will interact with the financial world through blockchain. Developers at Coinbase predict that in the future, "AI agents" will control many programs and be able to autonomously make payments using stablecoins without human intervention. This becomes possible through technologies like IP-402, Payment Require, and EIP-3009, which allow AI to self-sign transactions and pay for services, much like a user putting money into a vending machine to get a product.

Ethereum is considered the ideal platform for these activities due to its near-instant transaction processing and convenient wallet management. This enables AI to perform a series of services, for example, a self-driving car autonomously paying for tolls or buying tickets to live events without manual intervention. These functionalities are currently difficult to implement with traditional banking systems, as banks rarely allow direct and automated payments from user accounts. Even in developed countries like the US, automated services must go through intermediaries or require users to grant permission for each transaction, limiting the autonomy of AI. Conversely, crypto allows AI to perform small and repetitive transactions with just a private key, unlocking significant potential for automated applications.

Beyond the technical aspect, Coinbase also promotes Ethereum for business reasons. Coinbase's Base network is built on Ethereum, and the development of this ecosystem directly benefits Coinbase through transaction fees, staking, and related services. Therefore, promoting Ethereum is both a technological vision and a core business strategy for the company, aiming to exploit the potential of AI in finance and automated services.

Other Key Crypto & Market Updates

Sequans Communications, a French tech company specializing in semiconductor chips for mobile IoT, aims to hold 100,000 BTC by 2030. The plan, which began in July 2025 with $384 million, currently has 3,171 BTC and ranks 22nd globally. In the 2025–2026 period, the company will accumulate through capital raising, stock issuance, BTC-collateralized credit, and selling technology licenses. By 2030, Sequans plans to optimize its portfolio with BTC-based financial products, reducing its dependence on stock issuance.

KindlyMD and Nakamoto Holdings have merged, forming a publicly listed Bitcoin treasury company with the goal of holding 1 million BTC. The merged company retains the name KindlyMD, while Nakamoto becomes a subsidiary responsible for Bitcoin-related financial services. David Bailey, CEO of Nakamoto and Bitcoin Magazine, will lead the Bitcoin division.

TeraWulf (WULF) stock surged 60% to $8.71 after the company signed two 10-year AI hosting contracts with Fluidstack, valued at $3.7–8.7 billion, supporting over 200 MW of IT load at its Lake Mariner facility. Google pledged a $1.8 billion lease guarantee and received the right to purchase approximately 8% of WULF stock, solidifying the company's position in hyperscale AI infrastructure. While the broader market was sideways and other crypto mining companies saw mixed performance, WULF stood out with its strategy to expand beyond cryptocurrency mining.

Sources

• Bloomberg
• CoinDesk
• U.S. Treasury
• TradingView
• Reuters
• SEC
• White House Press Office
• CryptoQuant
• The Block
• Coingecko
• Dune Analytics
• Truth Social
• The Committee for a Responsible Federal Budget
• Fox News
• Sequans Communications Investor Relations
• KindlyMD Investor Relations
• TeraWulf Investor Relations

Disclaimer

This article is for informational purposes only and should not be considered financial advice. Please do your own research before making investment decisions.