Federal Reserve Rate Cut Could Boost Bitcoin Prices

The Federal Reserve may lower interest rates this summer, which could impact Bitcoin prices. Historically, Bitcoin has had a correlated relationship with equity markets.

From March 2022 to July 2023, the Fed rapidly raised rates to combat inflation. During this time, Bitcoin traded in a depressed range relative to its highs.

Bitcoin grew in the years before 2022 while interest rates were near zero. The 2022 rate hikes provided its first real test in a rising rate environment.

Many factors impact Bitcoin prices - adoption, regulation, exchange failures, etc. There's a tension between demand and supply as a peer-to-peer market.

If the Fed cuts rates, risk assets like stocks and Bitcoin may benefit. This could strengthen Bitcoin's price correlation with equities. Lower rates contrast with Bitcoin's fixed supply.