The Fed moves, Bitcoin follows!

Let’s talk a bit more about Bitcoin — specifically, does it get influenced by decisions of the U.S. Federal Reserve regarding interest rates? You might already suspect the answer, but let’s reinforce it, because many people still believe Bitcoin is isolated from macroeconomic events. An analysis by Santiment shows that since 2022, when the Federal Reserve began aggressively raising interest rates to combat inflation, digital assets have followed the volatility of traditional markets. For example, in March 2022, after the first rate hike since 2018, Bitcoin's price dropped by 5% within a week. In June that same year, following a 75 basis point hike, Bitcoin plunged 18%. On the flip side, in March 2023, Bitcoin rose by 12% in just two weeks as investors anticipated a slowdown in future rate hikes. These examples are countless and continue to this day, underlining the sensitivity of cryptocurrencies to U.S. interest rate decisions. So if you’re still doubting the macro influence on crypto — don’t. It’s massive and always has been.