US Inflation Exceeds Expectations, Bitcoin Remains At Level 62,000 US Dollars

Illustration. (Photo: Unsplash)

JAKARTA - Bitcoin (BTC) is currently around a price of US$62,000, and was at US$59,000 after the United States (Consumer Price Index) inflation report for September showed results that exceeded expectations.

The data shows an increase in inflation by 2.4 percent on an annual basis, slightly higher than market projections estimated at 2.3 percent. In addition, core inflation, which ignores energy and food prices, also recorded an increase to 3.3 percent, surpassing predictions of 3.2 percent.

This condition is one of the main factors that makes the price of Bitcoin unable to exceed the $64,000 mark, although it is hoped that there will be a boost from the Federal Reserve's cut in interest rates some time ago. For information, the US Federal Reserve has set an inflation target of 2 percent in the long term, and the current inflation rate higher than the target hints at further challenges for the US economy, as well as the crypto market.

Higher inflation than predictions can affect various classes of assets, such as risky assets such as Bitcoin. While lower interest rates are usually seen as a positive signal for digital assets and other commodities, the reality is that the effects of this monetary policy have not been felt in the short term.

In September 2024, the Federal Reserve has lowered interest rates by 50 basis points as a step to reduce inflation and support economic growth. However, this step is not enough to provide a significant boost for the price of Bitcoin to experience a higher spike.

Many market participants estimate the potential to cut additional interest rates by 25 basis points at a meeting in November 2024. However, after the latest inflation data is higher than expected, the potential for cutting additional interest rates is decreasing. This is due to concerns that too early monetary easing measures could trigger further inflation spikes, which in turn could disrupt overall economic stability.

INDODAX CEO Oscar Darmawan responded to the situation, saying inflation was higher than expected to put additional pressure on risky assets such as Bitcoin.

"The Federal Reserve's move to lower interest rates is expected to be able to provide fresh air for the crypto market. However, in reality, the market is still responding carefully," said Oscar, in his statement, Tuesday, October 14.

Oscar stressed that global economic uncertainty, coupled with geopolitical developments that continue to change, also affects market sentiment as a whole.

Currently, the crypto market as a whole is in a consolidated phase, with many investors still adopting a "wait-and-see" approach. According to Oscar, the potential for cutting interest rates, which is usually a positive catalyst for Bitcoin, has not been able to cope with the negative pressure from unstable global economic conditions.

"Many investors are still waiting for further clarity from the Federal Reserve policy direction before making more aggressive investment decisions," he added.

Even so, Oscar remains optimistic that in the medium to long term, Bitcoin has a chance to strengthen again, especially if inflation is successfully suppressed and monetary policy is starting to loosen.

"Behind this short-term pressure, I see a considerable chance for Bitcoin to recover, especially if global economic conditions improve and monetary easing takes place further," he explained.

Political factors have also begun to play an important role in determining the direction of the crypto market going forward. Ahead of the 2024 US presidential election, speculation has begun to emerge regarding the possibility of selecting a more friendly leader against digital assets, which in turn could be a positive catalyst for the price of Bitcoin and other crypto assets.

"Investors remain optimistic that Bitcoin could recover in the last quarter of this year, especially if global economic policies are more supportive of the crypto sector," Oscar said.