What Jerome Powell says is not just for Wall Street... it is a silent earthquake for Bitcoin and company.
The decisions of the U.S. Federal Reserve (FED), led by Jerome Powell, directly impact the cryptocurrency market, although not always visible at first glance. Interest rates, liquidity control, and anti-inflation policies modify the behavior of global speculative capital... and crypto is its most sensitive radar.
Three ways the FED shakes up the crypto ecosystem:
1. Rate hike = capital flight from risk
Every time the FED raises rates, investors prefer 'safe' assets like Treasury bonds. This reduces the inflow to emerging projects and volatile assets like Bitcoin or altcoins.
Michael Saylor, founder of MicroStrategy, has said: "Tight monetary policy is Bitcoin's true rival, not other digital currencies."
2. Strong dollar = weak BTC (at times)
The DXY (Dollar Index) moves in the opposite direction to the price of BTC. When the dollar strengthens due to FED decisions, BTC usually corrects... but that drop opens accumulation zones for whales and institutional funds.
3. The narrative of the refuge changes
In high inflation environments, Bitcoin is sold as 'digital gold'. But if the FED manages to control inflation without recession, the appetite for BTC as a refuge temporarily decreases.
According to Raoul Pal, former Goldman Sachs: "Cryptos are extremely sensitive to the macro environment. The narrative changes faster than the fundamentals."
Why is it vital to understand the FED if you are a crypto investor?
