'Inflation has peaked' narrative premature, impact to stay: Crypto experts

business-standard.com:

The US inflation for September was recorded at 8.3 per cent year-on-year (YoY), signalling a slower-than-expected fall in high prices. This led to a sharp sell-off in the global markets. The impact of the figures was more pronounced in the crypto market. And according to experts, it is here to stay.

"The entire [crypto] market is an off-sentiment market. There is no clear sentiment about where the market is headed and when it will start going up...Until the sentiments change, we will continue to see the pressure on Bitcoin and other cryptocurrencies," Manish P Hingar, a chartered accountant and the founder of a financial planning platform, Fintoo, said.

CoinDCX's research team told Business Standard that the latest figures suggest that the "inflation has peaked" narrative may have been slightly premature. The consensus in the market is that the Fed will hike the interest rates by 75 basis points in the September 21 announcement, they added.

Bitcoin, the largest cryptocurrency by market cap, has fallen nearly 10 per cent since the announcement of the figures and was trading at $20,367.16 on Wednesday, according to coinmarketcap.com. Ethereum, the second largest digital coin, was down nearly 8 per cent.

"Volatility resulted in about $104 million worth of crypto liquidations within an hour in the immediate aftermath of the announcement marking the removal of over-leveraged speculative positions in the market," CoinDCX added.

"Such market conditions make it clear that many projects, including large ones, will not survive to see a rebound or even a correction," Johnny Lyu, CEO of crypto exchange KuCoin, said.

Other cryptocurrencies like Solana, Avalanche, and Luna have taken bigger hits and have fallen over 10 per cent in