- Leading research platform 10x Research has issued a cautionary note to investors regarding Ethereum (ETH).
- The founder of 10x Research, Markus Thielen, highlighted the growing interest in Bitcoin ETFs following recent U.S. inflation data.
- “Our recommendation remains unchanged: stick with the winners (Bitcoin) and avoid the others (like Ethereum),” Thielen stated in a client note.
This article explores the latest insights from 10x Research, focusing on Bitcoin’s prospects amid fluctuating U.S. inflation rates and why Ethereum might be less favorable.
The Impact of U.S. Inflation on Bitcoin Investments
In a recent analysis, Thielen noted that investor behavior tends to shift significantly in response to U.S. inflation data. Periods of lower Consumer Price Index (CPI) figures often lead to increased investment in Bitcoin and related exchange-traded funds (ETFs). Conversely, higher inflation has historically caused a pullback in these investments.
Current Investment Trends
Since January, the data indicates fluctuating investment patterns in Bitcoin ETFs. According to Thielen, ETF inflows turned positive at the end of January but began to accelerate ahead of the February 13 CPI release. However, this positive trend halted when March inflation figures showed a rise to 3.2%, causing investors to reassess their positions.
Future Expectations and Fed’s Role
Thielen predicts that inflation has peaked, suggesting that the Federal Reserve (FED) is likely to signal more rate cuts within the year. This anticipation of lower interest rates might set the stage for the first rate cut by the end of the year, which could potentially influence Bitcoin investment activity further.
Conclusion
To summarize, Markus Thielen from 10x Research advises investors to remain focused on Bitcoin amidst the dynamic economic landscape shaped by U.S. inflation data, while cautioning against investments in Ethereum. This strategy is anchored on historical data and future economic forecasts, aiming to navigate through market volatility effectively.
