Bitcoin: These Macro-Events in July are Crypto-Critical; Why?

Paigambar Mohan Raj
Source: Cardiff University

The recent market crash that sent shock waves across the crypto industry stems from macroeconomic developments. However, three upcoming events could shed light on how things might move from here.

It is known that the latest market slump resulted from events outside the crypto realm. Hence it only makes sense to expect that these macroeconomic announcements would impact the industry again.

Inflation Statistics

The Consumer Price Index (CPI) and inflation statistics will be released on the 13th of July. The CPI is a measure of how inflation progresses. A continued increase in CPI could impact the demand for crypto.

The inflation rate has risen to distressing levels, reminding many of the great inflation between 1965 and 1982. During that era, inflation started at 1% but rose to 14% in 1980.

According to Glassnode analysis, while comparing the inflation of that time to what we face now, there are two similarities, cost-push and demand-pull inflation.

Michaël van de Poppe, CEO, and founder of EightGlobal, asserted the importance of the CPI announcement.

Additionally, Poppe believes that Bitcoin (BTC) could touch $28k if the $20k mark is flipped.

Poppe’s estimates fall in line with Deutsche Bank analysts’ findings. Regarding the medium-term forecast for BTC, research by Deutsche Bank analysts Marion Laboure and Galina Pozdnyakova offers an intriguing viewpoint. The S&P will return to its levels from January, according to the duo. Furthermore, the index’s link with bitcoin might cause its value to rise by 30% from present levels by the middle of 2022. BTC would then rise once again to the $28,000 level.

Moreover, the co-owner of The Crypto Academy said that a lower CPI would result in a suckers rally or a dead cat bounce for Bitcoin.

Interest rate hikes and Recession

Apart from the CPI, the FED‘s interest rate announcement is another important event to look out for. The decision to further increase interest rates, if at all, will be taken on 26th-27th July.

One of the main instruments the Federal Reserve and the U.S. Central Bank utilize to control inflation is interest rate hikes. The cost of borrowing rises as interest rates go up. This hinders financing and consumer and company expenditure.

Founder and CEO of Compound Capital Advisors, Charlie Bilello, believes that interest rates would be on the higher end of the spectrum. If that is so, it could further pull markets down.

Lastly, the U.S. Bureau of Economic Analysis (BEA) will release its estimation of US GDP for Q2 of 2022 on the 28th of July.

The GDPNow tracker of the Atlanta Federal Reserve currently predicts a -2.1% fall in GDP growth for Q2 2022. Q1 of 2022 witnessed a decline of 1.6% GDP. The US would technically enter a recession after two-quarters of GDP decreases. This, too, could impact the markets further.

The 13th, 26th-27th, and the 28th of July should be something to keep your eyes peeled on. If we go by the fact that macro events have impacted the crypto markets, we should expect the same to occur on these dates.