The Federal Reserveās interest rate decisions directly impact the crypto market.
š When Rates Go Up:
Borrowing becomes costly
Investors avoid risk
Crypto prices usually fall
Higher rates make traditional assets like bonds more attractive, draining money from volatile assets like Bitcoin and altcoins.
š When Rates Go Down:
Cheaper loans = more liquidity
Weaker dollar = BTC demand rises
Risk appetite increases
Low rates, like in 2020, helped fuel massive crypto gains.
š Bottom Line:
Crypto thrives in low interest, high liquidity environments. Watch the Fed ā itās a major signal for the next crypto bull or bear run.