📑 What is the connection between the Fed and crypto?
Friends, the crypto market is influenced by a large number of factors. Starting from the Fed to the weather forecast (just kidding). But I'm sure not all of you know how these factors are connected.
Let's get this sorted out.
1️⃣ THE FED
It is the Fed that influences the flow of capital into the crypto sector by manipulating interest rates: rates go down - money leaves traditional investments, the dollar falls, and opportunities for bitcoin open up. And vice versa.
2️⃣ Macrodata
Inflation, unemployment, and business activity are also on the Fed's pencil. Any changes can change the rate: inflation and unemployment fall - investors flee into risky assets. And vice versa.
3️⃣ The stock market
The S&P 500 index acts as a kind of barometer of the US economy.
For example, its decline in recent months plus the rising Treasury yield curve suggests a possible correction.
Whales like Buffett, Bezos and others are taking assets to cash, worried about an overheated market.
4️⃣ Politics
Before the US elections, the authorities try to be generous: government spending goes up, taxes go down, and the Fed usually keeps rates low in the name of stability. In addition, the cryptocommunity is becoming an increasingly influential force.
🔖 What's the conclusion?
In an unstable global economy, crypto is strengthening as an alternative asset, attracting both new enthusiasts and traditional financial giants.
❕ Bitcoin, born out of the 2008 crisis, has already penetrated the old financial system through ETFs, creating both synergy and dependence on the global market.
Did you know all these patterns?
🔥 — Yes, but it was still useful to me
🐳 — No, I didn't