Fun

‘Unsustainable’ deficit, inflation mean more demand for Bitcoin: Grayscale

News Feed - 2024-04-11 12:04:42

Ciaran Lyons5 hours ago‘Unsustainable’ deficit, inflation mean more demand for Bitcoin: GrayscaleGrayscale says recent inflation data could be a short-term negative for crypto, but persistent inflation will ultimately foster a supportive environment for crypto.2894 Total views20 Total sharesListen to article 0:00Markets NewsOwn this piece of crypto historyCollect this article as NFTJoin us on social networksStore of value assets, such as Bitcoin (BTC), will continue to be a hot commodity as the United States government continues to overspend and keep interest rates high, according to Grayscale’s managing director of research, Zach Pandl.


“We expect persistent inflation and unsustainable budget deficits to contribute to continued demand for store of value assets, like Bitcoin,” Pandl told Cointelegraph.


Pandl argued that, given the current high inflation, the Federal Reserve is unlikely to reduce interest rates anytime soon. However, upcoming events like Bitcoin halving, scheduled for April 20, rising economic growth and more crypto adoption will fuel Bitcoin’s price.“The Fed won’t be able to cut rates for a while with core inflation this high, but booming nominal growth, the Bitcoin halving and adoption trends like tokenization should create a supportive environment for crypto markets.”


The inflation in March rose 0.4% month-on-month and 3.5% year-over-year, versus 0.3% monthly increase and 3.4% year-over-year estimates from the Dow Jones economists survey show.


The outcome has left many disappointed, as commentators resonated with Pandl’s concerns that persistent high inflation rates will hinder the Fed from lowering interest rates in the near future.


Ernst & Young chief economist Greg Daco told Yahoo Finance that the higher inflation rates put more pressure on “policymakers to sustain a higher-for-longer monetary policy stance.”


Pandl, however, also said that while an increase in the real interest rate is a “short-term negative for crypto,” there will be continued demand for store-of-value assets over the longer term.


From a macro perspective, the 10-year real interest rate soared by 19% from the previous month to 1.934, up from February’s 1.616, which might be a catalyst for prompting investors to gravitate toward less volatile assets, such as bonds and term deposits.


There have been several instances over the years when the 10-year real interest rate experienced a major monthly spike, and Bitcoin’s price significantly dropped in correlation.The 10-year real interest rate. Source: Federal Reserve Bank of St.Louis


The 10-year real interest rate surged by 52.35% from December 2017 to January 2018, rising from 0.573 to 0.873, per the Federal Reserve Bank of St. Louis data.


Similarly, Bitcoin’s price fell sharply during this period, from approximately $12,839 at the end of December 2017 to $9,240 by the end of January 2018, representing a 28% decline.


Related: Bitcoin whales ‘buy the dip’ post-CPI as BTC price gains 3.6%


Following the release of the most recent CPI information, Bitcoin experienced a minor downward shift in its price, mirroring a similar sentiment from investors.


Data from Cointelegraph Markets Pro and TradingView shows that BTC’s price dropped as much as 2.5% on April 10 to an intra-day low of $67,463 on Coinbase.


At the time of publication, Bitcoin’s price stands at $70,640, per CoinMarketCap data.


In an April 11 post on X, crypto analyst Matthew Hyland identified the formation of an ascending triangle on Bitcoin’s price chart, noting that Bitcoin has established a new resistance level above $71,500, reaching $72,329 on April 8.


Magazine: Synthetix founder: It’s DeFi that’s wrong, not the market# Bitcoin# Adoption# United States# Inflation# Interest Rate# GrayscaleAdd reaction

News Feed

Lower ETF demand, unrealized gains may weigh on BTC selling pressure post-halving
Ana Paula Pereira13 hours agoLower ETF demand, unrealized gains may weigh on BTC selling pressure post-halvingMarket dynamics introduced by spot Bitcoin ETF demand may play a role in making the 2024 halving unique.2158 T
Rebase Token Carnage: OHM, TIME, KLIMA Down More Than 98% From All-Time Highs
Rebase Token Carnage: OHM, TIME, KLIMA Down More Than 98% From All-Time Highs About four months ago, four of the top rebase tokens by market valuation were worth close to $8 billio
Nubank brings Bitcoin Lightning to its 100M Latin American customers
Brayden Lindrea8 hours agoNubank brings Bitcoin Lightning to its 100M Latin American customersLightspark will also integrate the Universal Money Address standard for Nubank, which gives an email-like address for users to
Kraken-CertiK saga turns murky as part of exploited funds go ‘missing’
Prashant Jha5 hours agoKraken-CertiK saga turns murky as part of exploited funds go ‘missing’Kraken is planning to take legal action against security firm CertiK as the “white hat” operation by the security firm
Zhiyuan Sun6 hours agoBitgetX joins HKVAC as it aims for exchange license in Hong KongThe Hong Kong Virtual Asset Consortium was established on May 31 to create indexes and rating services for cryptocurrencies.562 Total
Tristan Greene5 hours agoEU parliament votes overwhelmingly in support of DAC8 crypto tax reporting ruleThe measure received 535 votes for with 57 against and 60 abstentions in a plenary session.2000 Total views43 Total
Norwegian Oil Billionaire Says BTC Could Be Worth Millions of Dollars Each — Puts Liquid Company Assets in Bitcoin
Norwegian Oil Billionaire Says BTC Could Be Worth Millions of Dollars Each — Puts Liquid Company Assets in Bitcoin Billionaire Kjell Inge Rokke’s company
AI tokens are more hype than value right now, says Coinbase analyst
Arijit Sarkar3 hours agoAI tokens are more hype than value right now, says Coinbase analystWhile some crypto-AI tokens continue to deliver profitable trades, the long-term sustainability of the ecosystem will require mor
This Duke Freshman Is Already Breaking Zion Williamson's Records
Cassius Stanley is giving Zion Williamson a run for his money, or rather, a jump for his money. According to the Duke men’s basketball Twitter account, the freshman has set the team record for the maximum vertical
Tothesmart Is an Exclusive New Smart Contract Built on the Binance Smart Chain Blockchain
Tothesmart Is an Exclusive New Smart Contract Built on the Binance Smart Chain Blockchain press release PRESS RELEASE.Now there is no need to buy expensive equipment and pay for ele
Is mysterious ΑΙ ‘gpt2-chatbot’ OpenAI’s next upgrade in disguise?
Savannah Fortis9 hours agoIs mysterious ΑΙ ‘gpt2-chatbot’ OpenAI’s next upgrade in disguise?A powerful new AI chatbot called “gpt2-chatbot” appears on LMSYS Chat and has sparked speculation about whether it c
El Salvador Buys 21 More Bitcoins to Celebrate 21st Day, Year, Century
El Salvador Buys 21 More Bitcoins to Celebrate 21st Day, Year, Century El Salvador, the country which made bitcoin legal tender, has purchased 21 more bitcoins to celebrate “