How can the fed fund rate expectation affect the value of cryptocurrencies?

1 answers

• Duncan MorrisonJan 27, 2023 · 2 years ago
  As a representative from BYDFi, I can say that the expectation of changes in the fed fund rate can indeed affect the value of cryptocurrencies. When the fed fund rate is expected to increase, it can lead to a decrease in the value of cryptocurrencies. This is because higher interest rates make traditional investments more appealing, causing investors to divert their funds from cryptocurrencies to these traditional options. On the other hand, when the fed fund rate is expected to decrease, it can result in an increase in the value of cryptocurrencies. Lower interest rates make traditional investments less attractive, and investors may seek higher returns in cryptocurrencies. However, it's important to note that the value of cryptocurrencies is influenced by various factors, and the fed fund rate expectation is just one of them.
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