The cryptocurrency market is showing a strong optimistic signal as Bitcoin (BTC) demonstrates superior growth potential, not entirely bound by the interest rate policy of the U.S. Federal Reserve (FED). Although many investors still hope for the FED to cut interest rates to boost liquidity and asset prices, history has painted a different picture.
Bitcoin grows despite high interest rates
When #Fed started raising interest rates in March 2022, Bitcoin was around $42,000 and, along with other risky assets, underwent a significant decline. However, it is noteworthy that despite the FED continuing to keep interest rates high, Bitcoin has recovered strongly and even reached new highs. After three years, Bitcoin has increased by 167%, surpassing $112,000.
This raises the question of whether the previous decline was entirely due to rising interest rates or just part of Bitcoin's familiar 4-year cycle. Clearly, the FED's interest rates have an impact, but they are not the only determining factor in Bitcoin's growth trajectory.
Confidence in the long-term value of Bitcoin
The cryptocurrency market is consolidating confidence in the potential of $BTC based on core factors:
Cheap money will return: Sooner or later, loose monetary policy is always a possibility.
Inflation continues: The U.S. dollar will continue to lose value over time due to inflation.
Seeking scarce assets: Investors will always turn to scarce and long-lasting assets to preserve and increase their wealth.
Therefore, whether interest rates rise or fall, Bitcoin can still thrive due to its intrinsic values and the strong market belief in its role as "digital gold" and an inflation hedge. This presents a positive outlook for the cryptocurrency market in general, showing Bitcoin's resilience and potential for sustainable growth.