1 min readThe materials on this website or any third-party websites accessed herein are not associated with and have not been reviewed or approved by: (i) Valkyrie Funds LLC dba CoinShares, its products, or the distributor of its products, or (ii) CoinShares Co., its products, or the marketing agent of its products.
Will inflation persist and bitcoin surge amid macroeconomic uncertainties?
This week, we've witnessed significant movements in both macroeconomics and the cryptocurrency market. Crypto assets continue to surge, with total ETPs nearing pre-pandemic highs at US$65 billion AuM. Despite volatile markets, Bitcoin demand remains robust, supported by limited supply and substantial net inflows.
In the macroeconomic sphere, indicators suggest a mixed outlook. The recent the FOMC minutes highlighted a cautious stance on inflation falling, with the expectation for the US to not fall into recession. We continue to believe that the FOMC is behind the curve in terms of inflation declines, despite this, it is becoming increasingly likely that first rate cut will not be until June this year.
Amidst these uncertainties, investors face a critical question: will inflation remain sticky, or will we see a return to very low inflation? As for digital assets, we expect the uptrend to continue as long as inflows into spot bitcoin ETFs remain steady, especially as the asset class could become increasingly used by investors as a hedge against uncertain macroeconomic and financial conditions.
