A large number of factors affect the crypto market. Starting with the Fed and ending with politics. But I am sure that not all of you know how these factors are related to each other.
Let's figure this out.
1️⃣ Fed
It is the Fed that influences the inflow of capital into the crypto sector by manipulating interest rates: rates are lowered - money is leaving traditional investments, the dollar is falling, and opportunities for bitcoin are opening up. And vice versa.
2️⃣ Macro data
Inflation, unemployment and business activity are also on the Fed's pencil. Any changes can change the rate: inflation and unemployment fall - investors flee to risky assets. And vice versa.
3️⃣ Stock market
The S&P 500 index acts as a kind of barometer of the American economy.
For example, its fall in recent months, as well as the growth of the Treasury bond yield curve, indicate a possible correction.
Whales like Buffett, Bezos and others are moving assets into cash, worried about an overheated market.
4️⃣ Politics
In the run-up to the US election, the government is trying to be generous: government spending is rising, taxes are being cut, and the Fed is usually keeping rates low in the name of stability. Additionally, the crypto community is becoming an increasingly influential force.
What is the conclusion?
In the conditions of an unstable global economy, cryptocurrency is strengthening as an alternative asset, attracting both new enthusiasts and traditional financial giants.
Bitcoin, born of the 2008 crisis, has already penetrated the old financial system through ETFs $BTC and $ETH , creating both synergy and dependence on the global market.
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