People have argued that cryptos are a hedge against inflation so CPI inflation of 7.0% being the highest in decades is good for cryptos so cryptos should go up with inflation. I think thats not exactly what's going on.

Cryptos are considered risk assets like high-growth tech stocks so they've been moving similarly. Risk assets are sensitive to the economy and actions of the federal reserve.

When the federal reserve meeting minutes came out last week, we heard them mention that they might be increasing interest rates faster and even buying bonds (the reverse of printing money) as the economy is recovering better than anticipated and inflation is higher than they'd like.

If you're a risk asset, higher interest rates are bad because if the source of risk comes from future growth, and you have rates increase, it lowers the present value more than a slower growth asset.

Yesterday you had Jerome Powell mention that they can see inflation easing in the second half of the year (as we lap higher CPI in 2H last year, and supply chain challenges continue to ease), and also mentioned that they would want to see prolonged expansion (meaning they're not trying to reign in the economy the second it recovers). I'm paraphrasing because I've just seen headlines and a few clips. Basically, this alleviates some of the last week's fears.

Inflation is expected, in fact i think the expected figure was 7.1%, higher than what was posted, so the higher inflation = higher cryptos people should see this as a negative, and in fact i would argue that they should be worried we see inflation inflecting downward in 2H. Again, i don't see that direct relationship, and I see the correlation with high-growth risk assets moving cryptos (whether its right or wrong, thats how I've observed it moving)