Investors Defy Inflation Fears as Crypto and Stocks Surge: Market Outlook

Omkar Godbole reports that two years ago, he predicted the US would experience higher inflation rates post-COVID, exceeding the Federal Reserve's 2% target. The recent reaction to the hotter-than-expected US core CPI report suggests many investors now agree. Despite July's annualized core CPI surpassing 3% due to President Trump's tariffs, bitcoin rose over 1% and ether jumped over 8%, with US stocks also rallying as traders priced in a September rate cut. This scenario implies the 2% inflation target is obsolete, with the US Treasury Secretary suggesting a 50 basis-point cut in September, which would be bullish for inflation-hedge assets like bitcoin and gold. Alternative cryptocurrencies saw gains over 10% as retail investors turned to cheaper coins. According to Will K, CEO of VOOI and Co-Founder of Symbiosis.Finance, 'Bitcoin's current rally reveals a structural shift in crypto market participation that could define this cycle.' The market composition has changed with institutional capital flowing through regulated products and sophisticated retail re-engaging through evolved decentralized infrastructure. USDC issuer Circle unveiled its stablecoin-focused layer 1 blockchain, Arc, while Nasdaq-listed ALT5 Sigma completed a $1.5 billion registered direct offering. The MOVE index, measuring implied volatility in US Treasury notes, fell to its lowest level since January 2022, supporting eased financial conditions and increased risk-taking.