The impact of the Fed's interest rate hikes, global conflicts and economic cycles of various countries on the trend of cryptocurrencies is multifaceted. Here are some observations and analyses:
1. Impact of the Fed’s interest rate hike:
• Consumer and business spending: Fed rate hikes could dampen spending by individuals and businesses, with knock-on effects for risky assets such as cryptocurrencies.
• Declining cryptocurrency prices: Historically, cryptocurrency prices have performed poorly during periods of high interest rates. For example, Bitcoin fell more than 84% during the Fed’s four rate hikes in 2018, but rebounded in 2019 after the Fed cut rates twice.
• Crypto market reaction: Cryptocurrencies including Bitcoin, Ethereum, Solana, Cardano and Terra fell sharply overnight after the Federal Reserve hinted it might start raising interest rates to combat stubbornly high inflation.
2. Impact of global conflicts:
• Global conflicts could affect economic cycles across countries and could cause investors to seek safer or more stable assets rather than riskier assets, such as cryptocurrencies.
3. Cryptocurrency market reaction:
• Cryptocurrency-related stocks rebounded from their lows of the day after the Federal Reserve announced a rate hike, showing the crypto market's quick response to interest rate changes.
In summary, the Federal Reserve’s interest rate policy, global conflicts, and economic cycles of various countries may affect the trend of cryptocurrencies to varying degrees.
My conclusion is that it is currently before the beginning of the year.
