How Will Record July Inflation Impact Bitcoin?

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Last Updated on 15 July 2022 by CryptoTips.eu

Jeroen Kok

Jeroen is one of the lead copywriters on Cryptotips.eu and discusses all recent events in the crypto market. This includes news updates, but also price analyzes and more. He developed his passion for cryptocurrency during the bull run in 2017. He has learned a lot since then. The combination of cryptocurrency and creative writing is perfect for Jeroen and an excellent way to share his knowledge with a wide audience. Find me on LinkedIn / [email protected]
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Earlier this week, the CPI (Consumer Price Index) figures released in the US showed that the countrymen of Uncle Sam are dealing with price rises of around 9.1% year on year.

In Europe, annual inflation is expected to be 8.6%, up from 8.1% in May according to a recent flash estimate from Eurostat. For some countries, like The Netherlands, the situation if even worse. People living in Amsterdam will likely have to deal with 9.4 % year on year price rises. What will all this inflation mean for the Bitcoin price?

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Aggressive response

Michael Rosmer, CEO of cross-chain asset management company DeFiYield said:

With the CPI numbers coming in higher than expected, I think most are anticipating an even more aggressive response from the Federal Reserve. Rate hikes could be higher perhaps even 100 basis points next round, and last for several more months. Bitcoin  along with tech, most likely will experience more downwards pressure as a result.

It does seem certainly possible for Bitcoin to hit $15,000 or lower, explained Rosmer. However, I suspect the macro environment will shift here rather dramatically. Fears of recession will mount.

Brett Sifling, analyst at Gerber Kawasaki Wealth & Investment Management, shared this view, explaining that:

Bitcoin continues to get more correlated to growth/tech equities, which don’t do too well in this environment. Speculative assets like crypto will continue to tighten under these inflationary and low liquidity conditions.

In essence, although volumes are currently rather low due to the height of the vacation season, most Wall Street analysts expect pressure on both tech stocks and Bitcoin to continue due to rising inflation.

Climb upwards

Lastly, Oliver Gale, CEO of Panther Protocol, did offer some hope for the future, stating:

Given that prices for oil and other key commodities are falling, there’s room for the Fed to back off its tightening, and likely soon given the risk of slowing growth. When this happens, recession will be on everyone’s mind.

 

And then equities and Bitcoin will likely have bottomed. From there, I suspect, we will see the beginnings of Bitcoin’s climb upwards.

SergeyNivens / Depositphotos.com