Lower inflation in the US supports the growth of cryptocurrencies

Analysts from the investment company QCP Capital have stated that the «soft index» of consumer prices (CPI) in the United States will support risky assets such as cryptocurrencies and company stocks. The experts base their forecast on a recent report from the U.S. Department of Labor.

According to the report, in July 2024, the CPI on an annual basis was 2.9%. On a monthly basis, the index (excluding food and energy) increased by 0.2%. Experts note that this is the most notable decrease in the indicator since the beginning of 2024.

Bitcoin’s reaction to inflation decline

Against the backdrop of declining inflation, the Bitcoin exchange rate showed significant growth, surpassing the $61,200 mark. This event underscores the close connection between macroeconomic indicators and the cryptocurrency market.

There is a steady trend towards declining inflation in the American economy. In June, inflation slowed from 3.3% to 3%, and July data shows a further decrease to 2.9%.

Expectations regarding Fed actions

QCP Capital experts believe that the soft CPI will support the recovery of stocks and cryptocurrencies amid the expected decrease in the U.S. Federal Reserve’s interest rate. The next meeting of the Federal Reserve System (Fed) council is scheduled for September 2024.

Despite the recent correction in Bitcoin’s price, QCP Capital analysts note that the options market is biased towards growth. In their opinion, a Bitcoin rally is possible by the end of 2024.