Crypto Markets Face 'Speed Bump' as Inflation Rises and Rate Hike Looms
Grayscale's Head of Research, Zach Pandl, has predicted that the latest US inflation data could create a temporary setback for cryptocurrency markets. This is due to the growing likelihood of the US Federal Reserve opting for another rate hike.
The August Consumer Price Index revealed that inflation is hotter-than-expected, with headline CPI rising 0.4% month over month and the annual rate remaining at 3.4%. On an annual basis, however, core inflation eased to 2.4%, in line with forecasts and its lowest level since 2021.
Pandl described this combination as a potential 'speed bump' for digital assets, but emphasized that he does not expect a severe cryptocurrency correction despite the looming fear of a rate hike.
He argued that any weakness would probably be limited, giving investors who missed the sharp August advance another opportunity to build positions. In fact, Pandl believes that dips will be shallow and create an opportunity for allocators who missed the price jump.