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Key US inflation figures hit its highest rate in four decades, which was higher than what many analysts had predicted. Bureau of Labor Statistics data shows that the CPI-U went up by 9.1% during the year through June before seasonal adjustment. CPI-U itself stands for Consumer Price Index for All Urban Consumers.

This number was higher than the 8.8% that Reuters and Dow Jones polls had predicted. And it was the highest reading for this measure of inflation over a year since November 1981. Investing in crypto coins or tokens is considered a risky bet, and most of the market is not regulated yet.

So, how does it affect the crypto price?

If the financial institution keeps going in this direction, it could put downward pressure on bitcoin prices by making the dollar stronger. Also, higher interest rates could reduce demand for digital currency by making securities that pay interest more appealing.

Brett Sifling, an investment advisor for Gerber Kawasaki Wealth & Investment Management, said, “The Fed is committed to overcoming inflation with aggressive rate hikes, which makes lower risk securities that pay interest more and more appealing.”

Then, what about Fed Policy Risks?

On the other hand, Rosmer issued a warning that the credit markets could be “broken” if Federal Reserve policymakers increase interest rates to an excessive degree. It’s possible that this will lead to a severe worsening of economic conditions.

He is of the view that Bitcoin and crypto assets may have to prepare for a decline. However, he believes that the current macro-environment movement is on an upward path in the coming months. Furthermore, Rosmer emphasized, “This will take time, but the Bitcoin opposition will be surprised.”

Oliver Gale had a similar viewpoint. “For the time being, risk-off investments are likely to outperform.” “Yield-bearing securities will do better as interest rates rise,” he said. “The dollar could continue to soar, creating havoc on markets.” And if the latter continues, the Fed risks “breaking things, such as credit markets or a large drop in equities,” according to Gale.

Gale believes Bitcoin will reclaim its all-time high

According to Gale, the prediction of falling oil prices and other important commodities could provide room for the Fed to lower the level of regulatory tightening. He also believed that such a situation might not be long in coming. This prediction is further strengthened by the possibility of a slowdown in the global Gross Domestic Product (GDP). Well, if that scenario really happens, then everyone’s eyes will be on a recession.

By then, equities and Bitcoin will most likely bottom out. And from there, Gale believes that we will soon see the start of Bitcoin’s rise. Gale revealed,

“It will take some time for this scenario to work out, but in the next year or two, I wouldn’t be surprised if Bitcoin hit all-time highs again.”