How do the Fed’s interest rates impact the crypto market?

Published at: March 3, 2023

The show Macro Markets, hosted by Marcel Pechman, which airs every Friday at 12 pm ET on the Cointelegraph Markets & Research YouTube channel, explains complex concepts in layman’s terms and focuses on the cause and effect of traditional financial events on the day-to-day crypto activity.

In today’s episode, crypto analyst Pechman analyzes the United States Federal Reserve interest rate and its relationship with cryptocurrency markets. For instance, high-interest rates are detrimental to risk assets. However, investors usually price today’s action on how the economy will be in six months or longer.

Viewers will learn why trusting charts and indicators can be misleading, as anyone can pick timeframes and scales that favor their biases and opinions. Pechman shows this in real-time by literally adjusting the scales and time frames to match his school of thought.

The episode continues by explaining the correlation between Bitcoin and the stock market — especially when investors fear a recession is coming or the cost of capital favors fixed income — followed by a deep dive into volatility indicators, including the stock market volatility index (VIX). 

Pechman goes on to explain how the most common volatility metric is backward-looking and even more complex instruments, such as the VIX indicator, should be interpreted.

To close the Macro Markets show, Pechman will apply his expert knowledge to explain real-life examples from gold markets, Tesla stocks and news articles in a straightforward and non-technical manner.

If you are looking for exclusive and valuable content provided by leading crypto analysts and experts, make sure to subscribe to the Cointelegraph Markets & Research YouTube channel. Join us at Macro Markets every Friday at 12:00 pm ET.

Tags
Related Posts
Bitcoin slides with S&P 500 as Fed signals tapering $120B monthly bond purchases
Bitcoin (BTC) prices briefly fell below $44,000 on Thursday as the United States Dollar strengthened after the U.S. Federal Reserve policy minutes revealed its intentions to limit its bond-purchasing program this year. Bitcoin risks $45,000 becoming new resistance The spot BTC/USD rate dropped 1.71% to a new week-to-date low of $43,955. The pair’s plunge appeared as a part of a technical correction that started after it had reached a three-month high of $48,176 on Saturday, following a 64.42% price rally. Bitcoin’s latest price decline also surfaced in line with a similar market bias on Wall Street. For instance, the benchmark …
Bitcoin / Aug. 19, 2021
What BTC price slump? Bitcoin outperforms stocks and gold for 3rd year in a row
Bitcoin (BTC) may be down over 30% from its record high of $69,000, but it has emerged as one of the best-performing financial assets in 2021. BTC has bested the U.S. benchmark index, the S&P 500, and the gold. Arcane Research noted in its new report that Bitcoin's year-to-date (YTD) performance came out to be nearly 73%. In comparison, the S&P 500 index surged 28%, and gold dropped by 7% in the same period, which marks the third year that Bitcoin has outperformed. At the core of Bitcoin's extremely bullish performance was higher inflation. The U.S. consumer price index (CPI) …
Etf / Dec. 29, 2021
Is there a way for the crypto sector to avoid Bitcoin’s halving-related bear markets?
There is good reason to be afraid. Previous down markets have seen declines in excess of 80%. While tightfisted hodling might hold wisdom among many Bitcoin (BTC) maximalists, speculators in altcoins know that diamond handing can mean near (or total) annihilation. Regardless of one’s investment philosophy, in risk-off environments, participation flees the space with haste. The purest among us might see a silver lining as the devastation clears the forest floor of weeds, leaving room for the strongest projects to flourish. Though, doubtlessly, there are many saplings lost who would grow to great heights themselves if they had a chance. …
Adoption / June 21, 2022
Wen moon? Probably not soon: Why Bitcoin traders should make friends with the trend
The impact of Federal Reserve policy and Bitcoin’s higher timeframe market structure suggest that BTC price is not yet ready for a trend reversal. Bitcoin (BTC) price continues to chop below the $22,000 level and the wider narrative among traders and the mainstream media suggests that a risk off sentiment is the dominant perspective ahead of this week’s Jackson Hole summit. Over the three-day symposium, the Federal Reserve is expected to clarify its perspective on inflation, interest rate hikes and the overall health of the United States economy. In the meantime, traders on crypto Twitter continue to fantisize about a …
Bitcoin / Aug. 25, 2022
Bitcoin underperforms stocks, gold for the first time since 2018
Gold and stocks have underperformed in 2022, but the year has been difficult for Bitcoin (BTC) investors, in particular. Worst year for Bitcoin since 2018 Bitcoin price looks prepared to close 2022 down nearly 70% — its worst year since the crypto crash of 2018. BTC's depressive performance can be explained by factors such as the Federal Reserve hiking interest rates to curb rising inflationary pressures, followed by the collapse of many crypto firms, including Terra, Celsius Network, Three Arrow Capital, FTX, and others. Some companies had exposure to defunct businesses, typically by holding their native tokens. For instance, Galaxy …
Bitcoin / Dec. 28, 2022