The Consumer Price Index (CPI) for March in the United States, announced last night, exceeded market expectations at 3.4%. After briefly dipping to $67,200, the price of Bitcoin quickly rebounded and has now risen above $70,000 at the time of writing.
In response to this, Zach Pandl, Head of Research at Grayscale, expressed strong confidence in the future prospects of Bitcoin during an interview with the foreign media outlet Cointelegraph. He believes that with the US government’s continued excessive spending and high interest rates (budget deficit), value storage assets like Bitcoin will continue to be popular commodities. Although an increase in interest rates may have a “short-term negative impact” on cryptocurrencies, the demand for value storage assets is expected to persist in the long term.
Furthermore, Zach Pandl also pointed out that given the current high inflation rate, it is unlikely that the Federal Reserve will lower interest rates anytime soon. However, the upcoming Bitcoin halving event, as well as economic growth and more use cases for cryptocurrencies, will drive further price increases for Bitcoin.
“With such a high core CPI, will the Federal Reserve announce interest rate cuts soon? But the growth of nominal GDP, the Bitcoin halving, and the adoption trends of tokenization should create a favorable environment for the cryptocurrency market.”
On the other hand, QCP Capital, a digital asset hedge fund, also stated that this rebound demonstrates potential demand for Bitcoin, with investors viewing the dip as a buying opportunity.
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