Since we are having a meeting of the American Federal Reserve
The impact of federal interest rate policy on digital currencies:
Investment attractiveness:
Rate hike: Increases the attractiveness of fixed-return assets such as bonds, which may push investors away from riskier assets such as cryptocurrencies.
Fixing or lowering interest rates: May make cryptocurrencies more attractive to investors looking for higher returns, especially in a high inflation environment.
Liquidity:
Raising interest: It may reduce liquidity in the market, which may lead to greater fluctuations in the prices of digital currencies.
Fixing or lowering interest rates: It may increase liquidity in the market, which may help stabilize digital currency prices.
Psychological behavior:
Raising interest rates: It may dampen feelings of optimism in the market, which may lead to a decline in digital currency prices.
Fixing or lowering interest rates: This may enhance feelings of optimism in the market, which may lead to an increase in digital currency prices.