#Fed #cryptouniverseofficial #Tradersleague

A little bit of economics

The Federal Reserve of the United States exerts an indirect but significant influence on the price of cryptocurrencies, primarily through its monetary policy decisions, particularly interest rates. When the Fed implements low interest rates, it seeks to stimulate economic growth, which often leads investors to seek higher-risk assets, such as cryptocurrencies, in search of better returns; this injection of liquidity tends to favor the rise in their prices. Conversely, by raising interest rates to combat inflation, the Fed makes credit more expensive and reduces liquidity in the system, making riskier assets less attractive, and investors typically withdraw from cryptocurrencies in favor of safer options, exerting downward pressure on their values. Essentially, the Fed's stance defines the appetite for risk in global financial markets, and since cryptocurrencies are considered risk assets, their price movements are intrinsically linked to the decisions and tone of the Fed's monetary policy.

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