- The US government revealed a consumer price index of 3.8%, the highest it has been since 2023, but Bitcoin and other top 10 coins all dropped.
- VanEck’s Mathew Siegel predicts BTC will hit $160,000, while BitMEX founder says it’s heading past $126,000 to set a new ATH.
Today, the US government revealed that the consumer price index was at its highest since 2023. Analysts had projected that high inflation data would move crypto markets, but Bitcoin dipped by over 1%, with XRP and Cardano losing over 4%.
The Bureau of Labor Statistics revealed that the CPI rose 0.6% for the month to bring the yearly total to 3.8%. The hike was triggered by energy prices, which have been surging for months now since the US started the conflict with Iran.
The CPI data was one of the important events that experts had pointed to that could affect the crypto market this week, as we reported. The others included Kevin Warsh taking over at the Federal Reserve from Jerome Powell, and the CLARITY Act vote on Thursday.
The overall crypto market remained bearish even after the CPI data, with the collective market cap dropping 1.5% to $2.67 trillion. Bitcoin was trading 1.5% lower at $80,287, with analysts watching whether the $80,000 support will hold.
Other large-cap cryptos did not fare any better. Ethereum is trading 3% lower at $2,260, while XRP and ADA lost 4% each. ONDO and Ethena’s ENA were the biggest losers among the large caps, shedding 10% each.
Experts say that given the CPI data, the Fed is unlikely to lower interest rates this year.
“…it’s possible that we may start pricing in rate hikes for next year,” commented Chris Zaccarelli, the head of investments at Northlight Asset Management.
Bitcoin has historically performed poorly during periods of rate hikes. Higher rates encourage investors to seek lower-risk assets like bonds, as borrowing becomes expensive.
Bitcoin to $160,000, Experts Say
While the latest CPI report points to a rate hike and BTC struggles to hold above $80,000, industry experts remain bullish.
Matthew Siegel, the head of digital assets at VanEck, says that the current price offers an ideal entry point for investors before BTC goes parabolic. He stated:
“If [Bitcoin] regains the 35x XBT/XAU cross implied by current levels of the Buffett Indicator, we’re looking at $160k, and that’s just catching up to where equities already are.”
The XBT/XAU is the Bitcoin-gold ratio, represented in the graph below by the orange line. When it rises, it indicates that BTC is outperforming gold, and vice versa. The blue line is the Buffett indicator, which, as Siegel points out, lines up with the XBT/XAU ratio around 35x. Currently, it’s at 17x, indicating that BTC is trading at half its strength.
Arthur Hayes, the founder and former CEO of BitMEX exchange, is just as bullish. In his latest post, he argued that “retaking the $126,000 is a foregone conclusion.”
Hayes, who now runs crypto investment fund Maelstrom, added:
“I expect the rally to intensify and the haters to cower in the corner as Bitcoin’s upward price trajectory turns explosive after punching through $90,000, where many call over-writers will rush to cover as their strike gets taken out. I have no fucking idea how high Bitcoin can go…”
