10x Research Stays Bullish on Bitcoin Despite Fed’s Hawkish Interest Rate Projections

10x Research Stands Firm on Bitcoin Amid Fed’s Hawkish Interest Rate Projections

Despite the recent pressure on bitcoin following the Federal Reserve’s hawkish interest rate projections, 10x Research continues to advocate for the leading cryptocurrency.

On Wednesday, the Fed announced that it would leave the benchmark borrowing cost unchanged in the range of 5.25%-5.5%, in line with expectations. However, the central bank’s prediction of just one rate reduction this year, down from three in March, spooked the markets after a softer-than-expected CPI release earlier in the day.

As a result, bitcoin has pulled back to $67,400 from its post-CPI jump to $70,000, according to CoinDesk data.

Despite this setback, 10x Research remains optimistic about bitcoin’s future, with founder Markus Thielen expressing confidence that the rally will soon resume.

“Our recommendation remains unchanged: to stick with the winners (Bitcoin) and avoid others (such as Ethereum). Our previous analysis has shown that a lower CPI number tends to lift Bitcoin prices, and we anticipate this trend will continue,” Thielen said in a note to clients.

Thielen pointed out that historically, a slowdown in inflation has attracted significant inflows into U.S.-listed spot bitcoin exchange-traded funds. Data from Farside Investors showed that the ETFs accumulated $100 million on Wednesday, breaking a two-day outflow streak.

The founder of 10x Research explained that ETF flows had dried up after the debut in January due to higher December CPI, which weakened the case for Fed rate cuts. However, flows resumed in February, pushing bitcoin higher.

Looking ahead, Thielen expects the Fed to signal more rate cuts later this year as inflation has likely peaked. Despite the current challenges facing bitcoin, 10x Research remains steadfast in its support for the cryptocurrency.