Bitcoin And U.S. Interest Rates: A Historical Examination!

Hello,

Welcome to this analysis about Bitcoin and the comparison to the U.S. interest rates history. When looking at the current market situation it has to be marked that the global economy is shifting heavily and changes occur in a dramatic manner. These dynamics began since the Corona Pandemic shocked global financial markets, global supply chains, and global government policies in a manner bearly comparable to what has happened before. Since these devastating occurrences, Bitcoin and other assets managed to recover, for Bitcoin an accelerated technical and fundamental adoption has taken place with countries adopting Bitcoin as a legal tender and Bitcoin getting acceptance on a broader scale. All these factors drove the price of Bitcoin upwards till it now reached a high-base while in the stock market the floods of cheap money drove the prices simultaneously the real economy is still damaged by the disruptions and is long not at the point it has been before these historical alterations. Now the Federal Reserve Decided upon increasing the interest rates to tackle ongoing inflation, for the stock market the reaction, in this case, is historically given by a decline however for Bitcoin the story needs to be assessed differently, therefore I am explicating these dynamics.

The FED Interest Rate Hikes Together With Bitcoins History:
Since Bitcoin was founded in 2009 by the infamous Satoshi Nakamoto it has shown up with a massive expansion and disruption within financial markets creating a boom around Bitcoin and Cryptocurrency which formed the first initial wave. After that till November 2015 Bitcoin moved into a correctional phase till the FED decided upon moving forward with increasing the interest rates from zero upwards. This decision also simultaneously marked the Bitcoin bottom in 2015 as it is seen in my chart and from this point on Bitcoin showed up with its massive bull market. The Bitcoin bull market moved simultaneously with the interest rate increases as it is seen in my chart and from the beginning on Bitcoin printed a whooping 65X till it peaked in 2017. According to these factors now there is an indication given that Bitcoin does not react negatively to interest rates like it is the case in the stock market, in fact, the complete difference holds true. The interest rate hikes were positive for Bitcoin as Bitcoin served as a hedge against fiat depreciation and declines in the stock market.

Gold In Interest Rate Hikes, Bitcoin In Interest Rate Hikes:
When comparing Bitcoin to other assets it becomes clear that Bitcoin is a similar asset to precious metals, mainly Gold, not without reason Bitcoin is called the digital Gold and in fact, there are many similarities. As gold has a 5000+ years-long history it gives a good indication on what is likely to happen during rate hikes. As it is shown within the chart below this text Gold also reacted similarly during rate hikes like it is the case with Bitcoin. From 1954 to 1981 a massive bull-market showed up in Gold with a huge expansion and the exciting thing is that the interest rate increases moved exactly simultaneously with the Gold price action showing a clear correlation. After that when the rates decreased again Gold also decreased again. The same dynamic can be watched with the rate increases in 2004 and 2015, always when the rates increased Gold also increased. Therefore, when considering this second crucial indication it gives a sight on what is likely to happen with Bitcoin during this next rate hike period, according to the factors Bitcoin is also likely to increase with these determinations.

In this manner, thank you for watching the analysis, all the best!
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Information provided is only educational and should not be used to take action in the markets.