The cryptocurrency Dogecoin (DOGE -4.49%) is moving lower today, down 4.1% since yesterday at 4:00 p.m. ET. The drop comes as the S&P 500 and Nasdaq Composite both fell slightly.
The latest inflation data is making investors nervous that the Federal Reserve won't cut rates in September -- rate cuts are typically helpful for riskier assets like crypto -- leading to a rush of selling.
Bitcoin retreats as investors wait for news from the Fed
After setting a new all-time high late last week, Bitcoin and the rest of the crypto market have retreated. The release of the latest wholesale inflation data is making investors nervous that the Federal Reserve will choose not to cut rates, which many had expected in September. Crypto investors began selling, and in the last 24 hours alone, more than half a billion dollars worth of crypto was sold.
The inflation data came right after U.S. Treasury Secretary Scott Bessent told investors that the federal government intends to build its strategic Bitcoin reserve by retaining the Bitcoin it seizes in law enforcement actions, not through purchasing Bitcoin off the open market. Investors had hoped the Trump administration would purchase it directly and drive up demand.
Image source: Getty Images
The combo of news is driving the whole market, Dogecoin included, lower.
Dogecoin is risky
While Dogecoin has outlasted most meme coins, it remains an inflationary asset with no fundamental utility. It was created for early crypto enthusiasts to have fun, and investors should adopt the same attitude. If you want exposure to crypto, opt for serious, proven projects like Bitcoin and Ethereum.
