Cryptos rally according to inflation data: Here is the reason

Cryptos rally according to inflation data: Here is the reason

In the days after the publication, unexpectedly high inflation data has recovered cryptocurrencies - while shares continue to act sideways.

Bitcoin and ether have recovered by about 10 % or 45 % Report Wednesday. The S&P 500 has increased by 0.7 % in the last 5 trading days, and the technology -based NASDAQ lost 0.8 %.

Annual inflation rose again in June and exceeded the expectations of the analysts and reached 9.1 %, the highest level since 1981, as the CPI data showed. The core CPI- which excludes volatile food and energy prices- reached 5.9 %in the 12 months to June

"I think the reason why crypto exceeded the downward movement is that I think there is currently more stability on the cryptoma markets," said Tom Pageler, CEO of Prime Trust. "By that I mean that things like the announcement of the Celsius bankruptcy messages and news about Terra 2.0 seem to give a way for the restructuring, while the traditional markets are still a little concern about what will happen in July."

The numbers from Wednesday draw an unfortunate picture for the officials of the US Federal Reserve, who try to contain inflation. In June, the central bankers decided to increase the interest rates by 75 basis points, and analysts expect the same or higher interest increase in the course of this month, which means a final end to the strategy from the pandemic period.

The recovery of crypto could also be a signal for what will probably come for digital assets in the future, an analyst said.

"If the market begins to react positively to negative messages, this is a signal that a local soil could be achieved for the time being, since the news may have been priced out of fear," said Marcus Sotiriou, analyst at global block.

But, added Sotiriou, after the bankruptcy of Celsius and the bankruptcy of Three Arrows Capital, the regulatory effects are still imminent.

"After the catastrophic events that have been on the cryptom market in the past few weeks, there could soon be a strict regulation," he said.

"The collapse of the CEFI creditors could be the reason why the supervisory authorities have tried to introduce draconian controls on cryptocurrency."

The Seclei Chairman Gary Gensler emphasized the need for investor protection and other nations reflect his opinion.

"The USA and Great Britain will deepen their relationships with the regulation of crypto-assets and market developments-also with regard to stable coins and research into digital central bank currencies," said Nikhil Rathi, Chief Executive of the UK Financial Conduct Authority, on Wednesday at Peterson Institute for International Economics.

"However, little has been done to support the growth of the crypto ecosystem from the US and British regulatory authorities, since their delay is displacing crypto-related business from their economies," said Sotiriou.

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The contribution Cryptos Rally in Wake of Inflation Data: Here’s Why is not a financial advice.