Is the bull market over? At present, everyone is pinning their hopes on the Fed's interest rate cut. The logic is that the interest rate cut-the increase in money supply will "release" money into BTC and then the BTC price will increase. However, from the phenomenon that the Fed has been raising interest rates in the past two years, the price of BTC has been steadily rising from more than 10,000 to 60,000, it seems that the actual Fed's interest rate does not have a definite impact on the BTC price. How to understand this?
Although it is generally believed that the Fed's interest rate policy has an impact on the price of Bitcoin, in fact, the price of Bitcoin is affected by many factors, of which the Fed's interest rate policy is only one of them.
It also includes:
Demand and supply factors: The fluctuation of Bitcoin prices is not only affected by monetary policy, but also by market demand and supply. The supply of Bitcoin is limited, which means that if demand increases, the price may rise, even if other factors remain unchanged.
Investor sentiment and market expectations: The Bitcoin market is often affected by investor sentiment and market expectations. If investors are optimistic about the prospects of Bitcoin, they may be willing to buy more Bitcoin, thereby driving up prices without being directly affected by the Fed's policies.
Risky investments and safe-haven demand: Bitcoin is sometimes viewed as a safe-haven asset, especially during times of economic uncertainty or high inflation expectations. Therefore, fluctuations in Bitcoin prices may also be related to investor demand for risky assets and hedging needs, which are not entirely controlled by the Fed's policies.
Technical factors: The Bitcoin market is also affected by technical factors, such as trading volume, miner activity, etc. These factors may affect Bitcoin prices independently of the Fed's interest rate policy.
Therefore, although the Fed's interest rate policy may have a certain degree of impact on Bitcoin prices, Bitcoin price fluctuations are usually the result of a combination of factors. Therefore, relying solely on the Fed's interest rate policy to predict Bitcoin prices may not be accurate.
