BTC
💸 Low interest rates encourage investments in higher-risk assets like cryptocurrencies.
📉 High interest rates discourage risk investments, negatively affecting cryptocurrencies as capital flows to fixed income.
📈 Bitcoin’s price movements reflect interest rate changes, peaking in late 2021 before falling as rates rose, and rebounding as rates decreased again in 2024.
@CobasAssetManagement:
“In an environment of low interest rates, investors tend to invest in higher-risk assets like cryptocurrencies. Conversely, high interest rates discourage risk investments, and capital flows towards fixed income, negatively affecting cryptocurrencies. This is well reflected in Bitcoin’s price, which reached historical highs in late 2021, shortly before the Federal Reserve and Central Bank began raising interest rates to combat inflation. The price then fell and did not break these highs again until March 2024, when interest rates were decreasing again.”
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