Grayscale Head of Research Zach Pandl says the latest U.S. inflation data could create a temporary setback for cryptocurrency markets.

This is due to the growing likelihood of the US Federal Reserve opting for another rate hike.

The August Consumer Price Index has revealed that inflation is hotter-than-expected. Headline CPI rose 0.4% month over month while the annual rate remained at 3.4%.

On an annual basis, however, core inflation eased to 2.4%, in line with forecasts and its lowest level since 2021.

A “speed bump” 

Pandl described the combination as a potential “speed bump” for digital assets.

“High-ish core CPI means decent chance of Fed rate hike,” he wrote on X. “This is a ‘speed bump’ scenario for crypto.”

Pandl does not expect a…