Decline in cryptocurrencies market, Fed effect.

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avatar of @tht
3 months ago - 1 minutes read

There has been a very serious decline in cryptocurrencies, especially in the last week. Even the most popular cryptocurrency, Bitcoin, has a drop of around 7.43%. This rate is higher in other weak cryptocurrencies.


Mostly, the market is affected by this before the Fed meetings or during the speeches of the FED chairman. In fact, all markets are affected by it. The decline is getting deeper as cryptocurrencies are very risky assets.

FED has a plan to reduce inflation in the USA to 2%. They want to raise interest rates to reduce inflation. I think it's hard to reduce inflation simply by raising interest rates. Even if they succeed, a recession will occur in the market. This is as serious a threat as inflation.

The Fed initially increased interest rates by 0.5 percentage points to reduce inflation. With the fall of inflation, they reduced this rate. They had reduced this ratio to 0.25. They later realized that 0.25 points is a low rate. As we understand from the last conversations, they will increase the interest rate by 0.5 points. There will be serious decreases in cryptocurrencies on the days when the interest rate increase will be announced, it is useful to make your moves accordingly.