To dive deeper, check out the complete article from original source:
https://droomdroom.com/us-fed-interest-rates-inflation-and-bitcoin-rallies/

US Fed interest rates, inflation, and Bitcoin rallies are deeply connected. While interest rate cuts increase market liquidity and boost spending, they can also spike inflation — raising the cost of everyday goods. 🛒💸

The Federal Reserve faces a balancing act. Cutting rates can stimulate the economy and investments (including crypto), but too much liquidity can drive prices up, as seen post-COVID when inflation soared above 10%.

💥 During the same period, Bitcoin hit an all-time high in 2021 but suffered a major crash during the extended inflation-driven crypto winter of 2022–2024. Still, Bitcoin has shown resilience — beating inflation with an average 60% CAGR return, compared to inflation’s 15% CAGR. 🔥

In contrast, assets like Ethereum and altcoins often underperform during market stress due to higher volatility. For instance, while Bitcoin dropped 25% between Dec 2024 and Mar 2025, Ethereum dropped 65%. 📊

🧠 Investors can leverage rate cuts by allocating into appreciating assets like Bitcoin. Past cuts have correlated with strong BTC rallies — such as the 2024 jump from $50K to $70K after a 0.75% rate cut, even before Trump’s win. 📊🗳

The takeaway? While rate cuts may hurt your wallet via inflation, they could also boost your portfolio through strategic crypto investments. Just don’t forget proper cold storage. 🔐