The cryptocurrency market is experiencing a downturn, with Ethereum's price underperforming Bitcoin. Tom Lee from BitMine Immersion Technologies predicts that inflation may be softer than anticipated, which could lead to interest rate cuts and increased capital for riskier assets like Bitcoin and Ethereum.
Lee noted that the gap between the consumer price index (CPI) and truflation is near a five-year high. He believes that if the Truflation numbers are a good predictor of where official CPI is heading, reported inflation could fall significantly over the next six months.
The prediction comes as the latest U.S. CPI numbers showed that inflation in January was cooler than expected, but still above the Federal Reserve's 2% target. The Fed may lower interest rates if inflation cools down further, which would direct more capital towards riskier assets like Bitcoin and Ethereum.