By Omkar Godbole (All times ET unless indicated otherwise)
A real-time inflation tracker in the U.S. is providing positive outcomes for cryptocurrency enthusiasts amidst ongoing bearish predictions.
The Truflation index, an independent and real-time blockchain-based monitor of daily shifts in the consumer price index (CPI), has dipped below 1% for the first time since early 2021. This index has decreased from 2.67% since mid-December, positioning it well below the Federal Reserve’s 2% inflation target.
While the official government data remains 700 basis points above the Fed’s target, the real-time reading indicates rapid disinflation, a scenario that favors quick interest-rate reductions by the bank.
This trend is positive for liquidity-sensitive assets like bitcoin, especially since its current trading price is 38% lower than the peak of $126,000 seen in early October. The Truflation figure stands in contrast to some analysts’ predictions of an inflation resurgence.
Cathie Wood, CEO of Ark Invest, stated on X, “Truflation indicates that consumer price inflation has fallen to 0.86% on a year-over-year basis, significantly below the 2-3% range maintained over the last two years. We believe inflation may even turn negative, in contrast to BlackRock and PIMCO’s forecasts.”
Additional good news comes from Robin Brooks, a senior fellow at the Brookings Institution, who forecasted that Kevin Warsh, President Trump’s choice for Fed chairman, might cut rates by 100 basis points within this year.
As of publishing, BTC is trading around $78,000 with smaller tokens somewhat recovering, evidenced by a 2% rise in the CoinDesk 80 Index within 24 hours. Notably, Hyperliquid’s HYPE and POL are the only top-100 tokens with gains exceeding 10%.
Analysts maintain a positive outlook on long-term potential. Emir Ibrahim, an analyst at Zerocap, remarked, “In the short term, crypto positioning is fragile. However, ongoing institutional adoption, greater stablecoin usage for cross-border transactions, and the emergence of tokenized real-world assets are expected to enhance the crypto market’s depth and interoperability.” He added, “Over time, these factors should bolster Bitcoin’s characteristics as a hedge against debasement, even if the market hasn’t fully acknowledged that narrative yet.”
