By
Godfrey Benjamin
April 29th, 2024
With Bitcoin halving 2024 around the corner, investors remain bullish on Bitcoin despite high inflation numbers. Analysts note that Bitcoin is gaining strong reputation as a hedge against inflation.
Soon after the US CPI data for the month of March reported hotter-than-expected inflation at 3.5%, Wall Street and the broader crypto market came under strong selling pressure. However, hours later, President Joe Biden stated that he still expects the Fed to cut interest rates this year.
Previously, several market analysts predicted the first rate cuts to come by June this year. However, with the new inflation data, the Joe Biden administration also expects the rate cuts to happen in late 2024. While speaking at a news conference alongside Prime Minister Kishida Fumio of Japan, President Biden said:
“I do stand by my prediction that before the year is out, there will be a rate cut. This may delay it a month or so – I’m not sure of that. We don’t know what the Fed is going to do for certain. But look, we have dramatically reduced inflation.”
This year is quite important for Mr. Biden considering the upcoming US Presidential Elections 2024. As a result, the US President has been banking on cooling inflation and ensuring interest rate cuts in order to boost his re-election prospects.
Thus, the Biden administration remains anxious for inflation to cool down which could give the Fed some levay to commence the interest rate cuts. During his State of the Union address, President Biden also reached out to companies over keeping the prices high. He said:
“Prices are still too high for housing and groceries, even as prices for key household items, like milk and eggs, are lower than a year ago. I have a plan to lower costs for housing – by building and renovating more than two million homes – and I’m calling on corporations, including grocery retailers, to use record profits to reduce prices.”
Bitcoin (BTC) Price Recovers Above $70,000 After Initial Dip
Soon after the CPI inflation numbers were out on Wednesday, April 10, Bitcoin (BTC) price faced a knee-jerk reaction with its price dropping to $67,000. However, it quickly recovered within a few hours and is currently trading above $70,000 again.
This shows that investors have shrugged off the inflation concerns while focusing on the upcoming Bitcoin halving, just 9 days from now. In recent weeks, BTC price has been stuck up in the tight range between $69,000-$71,000. According to Darren Franceschini, one of the co-founders of Fideum, the CPI figures surpassing expectations indicate a promising outlook for Bitcoin’s future.
“Given its limited supply and its reputation as a steadfast hedge against inflation, Bitcoin naturally stands out as a solid hedge for investors navigating the stormy seas of rising prices. And let’s not overlook the upcoming halving event. This periodic halving not only underscores Bitcoin’s scarcity but also tends to spark significant interest and speculation,” said he.