Economist Alex Kruger – Bitcoin’s Trend will be Decided by Inflation Data Jan 12, 2022 Jan 12, 2022 Kelly Cromley http://1AZFjzw2#Nwf63pYaMWq#xIY
Bitcoin NewsJanuary 12, 2022 by Kelly Cromley

Economist Alex Kruger – Bitcoin’s Trend will be Decided by Inflation Data

A well-known economist is paying a careful eye on inflation statistics because he thinks the next update will influence the direction of the cryptocurrency markets. According to Alex Kruger’s 117,100 Twitter followers, the Federal Reserve’s top worry is currently inflation.

The Fed has become hawkish, according to the economist, as it weighs several rate rises and a reduction of asset purchases in 2022 to confront growing inflation. Kruger emphasizes that if the Fed follows through on its objectives, a shortage of liquidity in the economy might have a detrimental influence on the crypto markets.

“Crypto assets are at the extreme end of the risk spectrum. Just as they profited from unusually loose monetary policy, they now suffer from unusually restrictive monetary policy, as funds move away from riskier asset classes.”

With Bitcoin (BTC) down more than 40% from its all-time high, Kruger believes the newest consumer price index (CPI) data, which measures inflation, might determine the next phase of the crypto market cycle.

“We’ll receive US inflation numbers on Wednesday… If CPI shocks to the negative, prices are likely to increase and trend for some time. If CPI shocks to the upside, ‘lights out,’ BTC will reach $30,000. It will be ensured by tradfi [traditional finance]. It’s difficult to say if the figure will come in at 7.1 percent, as predicted. Given the chart, it would sound familiar for bears to try to break the lows, fake a breakthrough, and then launch a ferocious rally. However, cryptocurrency will follow Bitcoin, and Bitcoin will follow equities.”

Kruger also thinks the Fed is willing to tolerate market downturns in order to maintain inflationary pressure in check.

“The Fed has said that it is ready to puncture the bubble. They do, in fact, have a bear case. The bull thesis is that inflation begins to routinely amaze on the low side when it does not need to. Inflation determines everything.”

AuthorKelly Cromley

Kelly is our in house crytpto researcher, delving into the stories which matter from blockchains being used in the real world to new ico coming out.