The rise or fall of interest rates has a direct and indirect impact on the price of Bitcoin. Below are the details of how this translates to the market:

Direct Impact:

1. Inverse Correlation: The rise in interest rates has an inverse correlation with the price of Bitcoin. This means that when interest rates rise, the price of Bitcoin usually falls, and vice versa. This is because investors look for safer and more profitable assets in times of high inflation and high interest rates, which can lead to a decrease in demand for Bitcoin and therefore a drop in its price[2 ][4].

2. Cost of Loans: Higher interest rates make loans more expensive, which can negatively impact investors who use loans to purchase cryptocurrencies. This can decrease liquidity in the market and ultimately negatively affect the price of Bitcoin[3].

Indirect Impact:

1. Fed Expectations: Expectations of a rise or fall in interest rates can influence the cryptocurrency market. For example, if a rise in interest rates is expected, investors may look for safer and more profitable assets, which may lead to a decrease in demand for Bitcoin and therefore a drop in its price[5 ].

2. **Inflation:** Inflation also has an indirect impact on the price of Bitcoin. When inflation rises, investors may look to assets that are considered a store of value, such as gold or cryptocurrencies. This can lead to an increase in demand for Bitcoin and therefore an increase in its price[3].

3. ETFs and Capital Flows: The rise or fall of interest rates can also affect capital flows into cryptocurrency exchange-traded funds (ETFs). For example, if interest rates rise, investors may look for safer, more profitable assets, which may decrease demand for ETFs….#Bitcoin $BTC #EarnFreeCrypto2024