Richard Fetyko, CEO of altFINS:
Not as bad as feared.
That’s how I would sum up today’s inflation data and BTC reaction to it.
Traders feared inflation was accelerating due to oil prices but that was not evident in today’s CPI data for August (up 3.4% Y/Y, same as in July and as expected).
So crypto and stock markets actually traded up, slightly:
Still, it’s supprising that BTC and crypto didn’t pull back much. I mean, it’s down in the last 7 days, giving up some of the big double digit gains in the last 1 month.
But I would have expected a negative reaction to the prospects of rate increases.
FED rate hike next week?
Following today’s CPI (Consumer Price Index) data for August, the market’s expectations for a 25 bps Fed rate hike (!) increased to 88% probability from 72% yesterday.
Clearly, the market expects the Fed to raise rates at the next FOMC meeting next week (Sep 16).
Yet, markets were up.
Guess some of this is priced in already.
Or maybe the narrative for BTC is flipping from trading as a risk asset (software stock) to trading as an inflation hedge, digital gold, as a hedge to USD debasement (loss of value).
With $40T in US debt (up 10% y/y) and growing, plus $1.3T in annual interest, the U.S. balance sheet continues to deteriorate.
BTC was created in 2008 following the Great Financial Crisis for exactly this reason (debasement of fiat money).
See BTC and other expert trade setups.
No matter how BTC trades in the next few days or weeks, the long term trend remains clear.
As long as USD purchasing power continues to lose from dilution (money printing), BTC will continue to gain attention and $$ allocation from investors.
Enjoy your weekend!
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