A widely followed cryptocurrency analyst has analyzed the potential repercussions of fairly up-to-date US inflation data. How will the crypto markets be affected by this situation?
Coin Bureau host Guy told his 71,400 subscribers in a new video that last month’s inflation figures shocked the markets.
“Wow. 9.1%. This was the US inflation figure we got yesterday for the month of June, and it took the market by surprise. The figure for May was 8.6% and the expectation for yesterday’s announcement was 8.8%. A lot of people didn’t say 9%, but the numbers keep increasing.”
Koinfinans.com As we reported, Guy also pointed out that the new data means that US inflation is at its highest level in four decades. After suggesting that these high inflation figures did not reveal the full extent of the turmoil, Guy evaluated the news’s initial implications.
“The markets were shaken upon the immediate announcement of these figures. This is because they know what is coming soon – more aggressive rate hikes. Prior to the release of yesterday’s inflation figures, markets were pricing a 50 to 75 basis point increase when the Fed met later this month – that number has now increased. […] An increase of 100 basis points seems increasingly likely.”
What Awaits The Crypto Markets?
The crypto analyst also explained that the Fed is not the only institution making such a move internationally – Canada announced a 100 basis point increase yesterday and the Bank of England recently announced a 25 basis point increase. Guy then touched on the possible effects of the data on the crypto markets.
“As for the impact on the markets, the crypto markets seem to have recovered from the initial drop. […]
If we really see a 100 basis point increase, I still think it could lead to a market crash. This is because this is still an unprecedented move and it shows the full gravity of the economic vortex we are in. Perhaps the growth picture turns out to be not so rosy, and then the Fed decides to soften the markets. If less than expected, this may be a comfort to the markets, at least temporarily.
But I still see a lot of upside in the short to medium term… Crypto markets have unique challenges that are pushing us further down. For example, in addition to Voyager’s bankruptcy yesterday, Celsius finally entered Chapter 11. This is likely to have a lot of repercussions to be felt by everyone. And then, of course, there is the Three Arrows Capital saga, which is getting more and more contested by the day.”
You can check the price movements here.
Disclaimer: What is written here is not investment advice. Cryptocurrency investments are high-risk investments. Every investment decision is under the individual’s own responsibility. Finally, KoinFinans and the author of this content cannot be held responsible for personal investment decisions.