To dive deeper, check out the complete article from original source:
https://droomdroom.com/us-fed-interest-rates-impact-global-crypto-markets/
The US Federal Reserve (Fed) plays a pivotal role in shaping global crypto trends 🌍. By adjusting interest rates, it indirectly controls the supply of US Dollars, which then impacts the crypto ecosystem — especially through USD-backed stablecoins like USDT and USDC 💵.
When inflation is high, the Fed raises interest rates to restrict dollar supply. This makes borrowing expensive, reduces spending, and shifts investor focus to bonds over crypto. Conversely, during recessions or low inflation, the Fed cuts rates, pumping more dollars into circulation. Cheaper loans mean higher spending and more capital flowing into risk assets like Bitcoin and altcoins 🚀.
🔗 Since over 96% of stablecoin volume is dollar-based, any change in dollar supply directly influences crypto liquidity. These stablecoins act as bridges, helping investors move in and out of crypto positions without losing value 💱.
🏦 Stablecoins like Tether even invest reserves in US Treasury Bonds, tying their stability to Fed policies. When the Fed prints more money or reduces rates, it indirectly boosts stablecoin issuance, enhancing crypto market liquidity and purchasing power.
🧠 Bottom line: The Fed doesn’t just move Wall Street — it shakes up Web3 too. Every rate hike or cut sends ripples through the blockchain world, making Fed updates a must-watch for every crypto investor.
Rate hikes = cold markets.
Rate cuts = 🔥 bullish momentum.
