Bitcoin Approaches $100k After CPI Report

Benjamin Cowen

Summary of Video Transcript

Introduction

The video discusses the recent CPI report and its impact on Bitcoin. The headline inflation rate increased from 2.7% to 2.9%, in line with expectations, while the core CPI dropped from 3.3% to 3.2%, which was slightly better than expected.

Labor Market and Inflation

The labor market is performing well, with the unemployment rate at 4.1%. However, good news in the labor market is considered bad news because it may lead to higher wage inflation and subsequently higher headline inflation. On the other hand, good news in inflation is considered good news because it may lead to a drop in the 10-year yield, which is beneficial for risk assets like Bitcoin.

10-Year Yield

The 10-year yield has been increasing since the Fed started cutting rates in September. The yield may continue to drop if inflation decreases, which would be beneficial for Bitcoin. However, if the labor market continues to perform well, it may lead to higher inflation and a higher 10-year yield, which would be detrimental to Bitcoin.

Bitcoin Price

The host believes that Bitcoin will eventually sweep its low and then rally back up to the lower high structure, which corresponds to roughly $100,000. The timing of this event is uncertain, but it may happen sooner rather than later.

Inflation Categories

The host analyzes the different categories of inflation, including food, housing, and transportation. While some categories are experiencing deflation, others are experiencing inflation, which is contributing to the overall increase in headline inflation.

Conclusion

The host concludes that the market will continue to monitor inflation and labor market data to determine the direction of the 10-year yield and Bitcoin. The host remains optimistic that inflation will not increase significantly and that Bitcoin will rally back up to the lower high structure.

Key Points

  • Headline inflation increased from 2.7% to 2.9%
  • Core CPI dropped from 3.3% to 3.2%
  • Labor market is performing well, but good news is considered bad news
  • Good news in inflation is considered good news
  • 10-year yield may continue to drop if inflation decreases
  • Bitcoin may eventually sweep its low and rally back up to the lower high structure ($100,000)