- US Data and the Crypto Market
- Details on the Subject
- Conclusions
As volatility rises in the crypto market, noteworthy developments continue to emerge. According to Grayscale’s research head Zach Pandl, in a statement made on August 14, lower-than-expected core inflation in the US has set the stage for Bitcoin to retest its all-time highs.
US Data and the Crypto Market
The US Bureau of Labor Statistics (BLS) reported the July Consumer Price Index (CPI) data on August 14, showing a 2.9% annual price increase for consumers, marking the slowest rate since 2021. Pandl stated this is significant because it would allow the Fed to start lowering interest rates. He added:
Details on the Subject
According to CME FedWatch, the futures market pricing currently reflects expectations of at least a quarter-point rate cut at the Federal Reserve’s next meeting in September. Rates are currently targeted at around 5.5%. Bitcoin’s response to the report was surprisingly moderate. According to data from TradingView, Bitcoin rose to about $62,000 following the news and then fell by more than 3% in the next hour. Crypto markets have largely recovered from the sharp pullback in August. Bitcoin saw its price drop by about 18% in one day. According to the company, Grayscale is the largest crypto asset manager with over $25 billion in assets under management (AUM).
Conclusions
The Federal Reserve can continue with expected rate cuts without unnecessarily affecting prices for consumers, an encouraging signal for crypto investors. Given the current economic conditions, Bitcoin has the potential to retest its all-time highs.
Macro-economic data and Federal Reserve decisions play a crucial role in the future of the crypto market. The impact of these factors on Bitcoin's value will be closely watched by investors and analysts.
