- 10x Research tells Bitcoin investors or enthusiasts to stay bullish
- Why should you avoid Ethereum and altcoins for now?
- US Federal Reserve keeps benchmark interest rate
10x Research, a popular digital asset and cryptocurrency research firm, has asked crypto enthusiasts and investors to stick to Bitcoin and avoid others, including Ethereum.
Bitcoin, the world's largest cryptocurrency by market valuation, has seen a few hours of volatility, dropping from $70,000 to around $67,400. Experts suggest that this recent movement came after the Federal Reserve System, otherwise known as Fed, released rate projections.
What did 10x Research say about Bitcoin?
In a note to clients on Thursday, Markus Thielen, founder of 10x Research, said, via CoinDesk,
"Our recommendation remains unchanged: to stick with the winners (Bitcoin) and avoid others (such as Ethereum). Our previous analysis has shown that a lower CPI number tends to lift Bitcoin prices, and we anticipate this trend will continue."
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According to Thielen, the U.S.-listed spot bitcoin exchange-traded funds have historically seen massive inflows during periods of inflation slowdown. According to Farside Investors' preliminary data, the ETFs collected $100 million on Wednesday, ending a two-day run of withdrawals.
Bitcoin price movement
Thielen went on to say that after the ETF's debut on January 11, the case for Fed rate cuts was weakened by higher-than-expected December CPI data. In February, the flows restored, driving up the price of bitcoin.
In a note at the end of May, Thielen said, “ETF flows turned positive at the end of January but only started to accelerate slightly ahead of the CPI data release on February 13. But when inflation again increased to 3.2% on March 12, Bitcoin ETF inflows stopped as the market priced out the narrative of 2-3 rate cuts.”
Recall that the US Federal Reserve kept its benchmark interest rate at its current level on Wednesday and only planned to lower it once in 2024, while officials awaited additional proof that the country's inflation was actually beginning to decline.
The federal funds rate, or the amount banks charge one another for short-term loans, was maintained between 5.25% and 5.5%. Since July of 2023, it has stayed there, at its highest point in 23 years.
