The next Federal Reserve interest rate decision meetings this year are September 17 – 18, November 6 – 7, and December 17 – 18. Will the Fed decrease, increase or hold on its current rate of 5.50%?How might bitcoin respond to Federal Reserve rate cuts? Since bitcoin can be seen as a proxy for monetary policy and the stability of the dollar, understanding its behavior during rate-cutting cycles is crucial. Keep in mind however that with only a decade of bitcoin data, this analysis should be approached with caution.The graph shows Fed Funds and the Bitcoin price relationship since 2020. The chart shows Bitcoin in 2020 to 2021 skyrocketed higher as the Fed lowered interest rates to almost zero percent during the pandemic. Starting about 2022 Bitcoin price moved lower with the Fed starting to raise interest rates again after the pandemic was almost over. Starting 2023 Bitcoin increased in price as the Fed continued to raise rates.Is Bitcoin truly reverse correlated to Fed Funds? If rates go down, crypto goes up? If bitcoin is indeed a proxy for monetary policy, a rate cut should theoretically benefit it. However this limited data suggests otherwise, so be careful thinking if a Fed rate cut will send crypto higher.More By This Author:Time To Invest And Or Trade In Bio-Tech Stocks?
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