Crypto started rallying after the halving, which coincided with long interest rates rising as the COVID-19 pandemic appeared in March 2020. By injecting massive amount of liquidities, the Fed was also sowing the seed for higher inflation. From mid-April 2021 to mid-July 2021, the rates took a break mid-way thru it's cycle. Lower interest rates means that the inflationnary pressuretook a pause, which manifested itself with the crypto market suffering a mid-cycle correction that we have seen since mid-May 2021. However, the crypto bull market is set to resume for the second half of 2021. Higher upcoming inflation expectations, along with higher interest rates is very bullish for crypto in general and should manifest itself with the pink squiggle I drew. I would expect the yield curve to touch the upper bound in the next couple months while crypto keeps rising in tandem. The yield curve will start inverting when the Fed will proactively raise the short interest rates and this is when the crypto bubble will peak / burst. But while central banks sleep on the switch and keeps inflation unchecked, this is very positive for crypto.
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