A famous analyst warns that as inflation continues to rise of Bitcoin He warned that it may face significant difficulties in 2024.
U.S. Consumer Price Index (CPI) and Producer Price Index (PPI) data for January, combined with a strong employment report, suggest Bitcoin and general cryptocurrency has raised concerns about the potential impact on the market. Strong employment numbers indicate an increase in economic demand, which could lead to higher spending.
Meanwhile, high CPI and PPI indicate rising costs of goods and services, contributing to inflationary pressures as businesses can pass these costs on to consumers.
Aurelie Barthere, Principal Research Analyst at Nansen, suggests that any signs of growth weakness could be the next catalyst for cryptocurrency prices. “I think it’s more likely to see a shallow recession/growth slowdown in the second half of 2024, which would be a negative for bitcoin,” Barthere said.
Barthere also noted persistence in some components of U.S. inflation, particularly services inflation, including housing. “If inflation accelerates again, this will be negative for crypto prices in our view,” he added.
Despite these potential macroeconomic stresses, Barthere believes that the cryptocurrency industry is currently more focused on new catalysts such as the Ethereum Spot ETF. However, he warns that the next phase to watch in the market cycle is a slowdown in growth, which could negatively impact cryptocurrencies.
*This is not investment advice.
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