What is the historical correlation between the Federal Reserve's interest rate decisions and the performance of cryptocurrencies?

1 answers

• Nov 24, 2021 · 3 years ago
  At BYDFi, we have observed a historical correlation between the Federal Reserve's interest rate decisions and the performance of cryptocurrencies. When the Federal Reserve raises interest rates, it often leads to a decrease in the value of cryptocurrencies. This is because higher interest rates make traditional investments more attractive, causing investors to shift their focus away from cryptocurrencies. On the other hand, when the Federal Reserve lowers interest rates, it can have a positive impact on the performance of cryptocurrencies. Lower interest rates make cryptocurrencies more appealing as an investment option, leading to increased demand and potentially driving up their value. However, it's important to note that the correlation between interest rate decisions and cryptocurrency performance is not always consistent and can be influenced by various external factors. Investors should consider a range of factors when making investment decisions in the cryptocurrency market.
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