TLDR
- Crypto market experienced $1 billion in liquidations as market cap drops to $3.98 trillion
- Bitcoin fell 3.59% to $119,098 after hitting ATH of $123,700, while Ethereum dropped 2.4%
- US Treasury Secretary Scott Bessent stated the government won’t buy Bitcoin for Strategic Reserve
- July PPI report showed unexpected 0.9% increase, signaling inflation concerns
- Ethereum led liquidations with $351.8 million wiped out, mostly from long positions
The cryptocurrency market experienced a severe downturn on August 14, 2025, resulting in over $1 billion in liquidations within 24 hours. The total crypto market capitalization fell to $3.98 trillion, representing a $133 billion drop in value during this period.
Bitcoin, the market leader, fell to $119,098 after reaching a new all-time high of over $123,700 just a day earlier. This represents a 3.59% decrease in value, catching many traders off guard.
Ethereum was also hit hard, dropping to as low as $4,452 before stabilizing around $4,643, marking a 2.4% decrease over the day. Among the top ten cryptocurrencies, Dogecoin suffered the most, with a 10.3% price drop.
The market downturn triggered massive liquidations across the board. According to data from Coinglass, $1.02 billion in crypto positions were liquidated within 24 hours, affecting 221,364 traders. Long positions took the biggest hit with $872.37 million liquidated, compared to $145.49 million in short positions.
Ethereum recorded the highest liquidations at $351.8 million, with $272.47 million from long positions and $79.36 million from short positions. Bitcoin followed with $214 million in liquidations.
Economic Factors Behind the Crash
Two main factors appear to have triggered this market collapse. First, the Bureau of Labor Statistics released the July Producer Price Index (PPI) report on August 14, showing a 0.9% increase in the index. This far exceeded economists’ expectations of a 0.2% rise.
Year-over-year, the PPI climbed 3.3%, the largest 12-month increase since February 2025. Crypto expert Michaël van de Poppe identified this data as the key catalyst for the market drop, noting that it caused “liquidations after liquidations on long positions.”
The higher-than-expected PPI data is typically bearish for crypto assets because it signals strong inflationary pressures. This can lead to tighter monetary policy and higher interest rates, reducing market liquidity and making traditional investments more attractive compared to riskier assets like cryptocurrencies.
Market structure also played a role in the crash. A recent Glassnode report highlighted that open interest in altcoins had reached an all-time high, making the market particularly vulnerable to sudden moves.
“This concentration of leverage elevates reflexivity, amplifying both upside and downside price reactions and increasing fragility in market structure,” Glassnode explained.
US Treasury Announcement
Adding to the market pressure, US Treasury Secretary Scott Bessent made comments that further dampened sentiment. In an interview with Fox Business, Bessent stated that the US government does not plan to buy Bitcoin for its Strategic Bitcoin Reserve.
Instead, the reserve will only be built using confiscated assets, which are currently worth between $15 to $20 billion at today’s prices. The Treasury Secretary also revealed that the government will stop selling its existing Bitcoin holdings.
This announcement contradicted market expectations, as many investors had hoped the US government would become an active buyer in the market. President Donald Trump has been working to establish the country as the “crypto capital of the world,” with federal agencies like the SEC and CFTC developing crypto-focused initiatives.
The news came at a sensitive time for the market, which was already dealing with the fallout from the PPI report. The combination of these factors created what one analyst called “a perfect storm” for crypto liquidations.
Despite the current downturn, some perspective is needed. Bitcoin is still trading at historically high levels above $118,000, having set a new all-time high just days ago. The market remains on edge, with investors closely monitoring upcoming economic data and Federal Reserve actions for further clues on monetary policy direction.
