RE: Not financial advice – October 2022
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Do the fed have effect on the price value of bitcoin most of the time?
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Do the fed have effect on the price value of bitcoin most of the time?
I don't think it's had a big effect on the price of Bitcoin in most of Bitcoin's history, but I absolutely think it has an effect now.
The crypto market is not just retail investors like you and me. There are institutions investing in that space now; MicroStrategy, Tesla, JP Morgan, etc, and this means that these institutions will make decisions based on what the US Fed does. When the US Fed raises interest rates, these firms will take their money out of risky assets like tech stock and crypto, and put them into safer assets like government bonds and value stock.
I suspect there is a ton of money sitting on the sidelines (ie, being held as USD in banks) that is waiting for the US Fed to announce they won't be raising (or will reduce) interest rates and at that point I expect the price of Bitcoin to literally go up within hours as these institutions try to ride the wave up (that they themselves cause).