Hot inflation restrains the Fed, but can crypto explode at the end of the year?

Inflation data in the U.S. has just dimmed the prospect of rate cuts in September, pulling Bitcoin and Ethereum prices down from short-term peaks. However, many experts believe that the increase in global liquidity could open up strong recovery opportunities for crypto in Q4.

The Producer Price Index (#PPI ) for July rose 0.9%, the highest level in over 3 years, causing investors to reduce bets on the Fed easing policy soon. As a result, Bitcoin fell 4.2% to $118,200, and Ethereum dropped 3% to $4,570 (according to CoinGecko).

Thomas Perfumo, global chief economist at Kraken, commented: “The hotter-than-expected PPI data has shaken confidence in the Fed's ability to cut interest rates. However, in the long term, high inflation actually reinforces the appeal of digital assets like $BTC with a fixed supply of 21 million coins.”

According to Jamie Coutts (Real Vision), the current macroeconomic context is different from previous cycles: inflation is difficult to control, and unconventional monetary policies such as targeted bond issuance or yield curve control may be applied. He forecasts that September could be weak (Bitcoin has often declined in 6 out of the last 10 years), but Q4 will be bright thanks to China's stimulus and a weakening USD.

In summary, the PPI shock has dampened short-term expectations, but if global liquidity remains positive, the crypto market could very well enter a strong surge by the end of the year. #anh_ba_cong