Will September Save Crypto Bull Run From Inflation: 3 Catalysts To Expect

As inflation appears to be reliably back to acceptable levels and as the restrictive level of interest rates may slow down the economy too much, the crypto bull run may make a comeback in September.

Day by day it makes more sense to slowly start lowering rates towards 3% or lower. Here are three other catalysts that point to September or October for the bull run to rocket –

1. Fed Interest Rate Cut Predicted For September, After Inflation Report

The risk trade doesn’t make much sense anymore if a safer option opens up. This has been the last two years of trading.

The whales aren’t really in it to make big bucks, but to maintain the wealth that’s already there, preferably risk free and above inflation.

So far, the whales did this through bonds (thanks to an inverted yield curve) but soon they’ll realize they’ve  jumped the gun on the bond trade and will get cold feet after another inflation report where MoM had a 0.2% increase, matching expectations.

The bond market is now fully pricing in a hard landing and a recession.

Meanwhile everyone on Wall St says things are fine and a soft landing is coming.

Always trust the credit traders. They get it right a lot more often. pic.twitter.com/DrIdGR2sNd

— QE Infinity (@StealthQE4) August 9, 2024

One money printing cycle directed towards the market and bond investors will be sitting on the worst trade possible.

The upshot is the market wants lower inflation, which means higher chances of a fed cut. This week we got a really low, cold, (whatever you want to call it!) reading on CPI and PPI.

2. Pre-election into November Boost, Traders Are Hungry After Summer

Often during election cycles, like the one in the US, politicians give out cookies to the kids table. The cookies being stimulus and the kids being us.

This means we could see student loan forgiveness, stimulus packages, rate cuts or several other forms of quantitative easing as it boosts favorability during elections.

Keynesian economics suggests that government spending can stimulate economic growth. By increasing aggregate demand, the economy can expand, potentially making the debt incurred for such spending a smaller proportion of the overall economy in the future.

When you don’t have exponential growth, the costs of operating on the debt become unsustainable and it all comes tumbling down until the next stimulus is applied to keep the system going for the next couple of years.

That’s where we’re at now. Until you get to the point where all your institutions and private constructs are so bloated that they collapse under their own weight.

In short, it’s why we buy Bitcoin.

3. Inflation be Damned, The Bitcoin Halving Will Come Into Play

The Bitcoin Halving happened in April and we didn’t see a bump at all. Instead crypto rallied beforehand deflating a rally for the summer.

Thankfully, the built in deflationary mechanism after the halving, where BTC distributed to miners is halved, often come into play months after the event. We’re at that point now, the perfect storm.

It’s all happening at once and we don’t see how crypto doesn’t finish the year with a bull run.

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Disclaimer: Crypto is a high-risk asset class. This article is provided for informational purposes and does not constitute investment advice. You could lose all of your capital.