It is often said:

🔺 Inflation is rising — bad for the markets.

🔻 Inflation is falling — good.

However, upon careful examination of the actual data from recent months, one can notice an astonishing pattern: inflation and the crypto market move synchronously. And this correlation is much deeper than just a reaction to Fed rates or the money supply.

What history shows

  • May 2024 — inflation in the USA reaches 3.3%. This is the peak. At the same time, the market shows local maxima, after which a decline begins.

  • September 2024 — inflation drops to 2.4% — and this is the bottom point for many crypto assets.

  • September — January 2025 — inflation rises again, reaching a peak in January (around 3%). And the market follows it upwards again. The highs occur precisely in January.

  • February — April 2025 — inflation decreases to 2.4–2.5%, the market again goes into correction.

  • April — May — a rebound occurs both in the inflation graph and in the market. Inflation starts to rise again.

    The situation is paradoxical:
    Rising inflation = rising crypto market

    Falling inflation = falling crypto market

    Although at first glance this seems illogical — since high inflation does not allow for lowering interest rates — in reality, it can signal an influx of liquidity, demand, and a more active economy. And this is already fuel for the growth of risk assets, including Bitcoin and altcoins.

    What to expect next?

    If this logic holds true, then it makes sense that inflation could rise again to around 3%, and along with it, the market will continue its global growth.

    It seems that rising inflation is bad, as there is no incentive to lower the rate, but looking at this data — one realizes that Bitcoin only grows with rising inflation. A double-edged sword.

    #инфляция #ФРС