There are two sets of opinions about whether higher interest rates help or hurt crypto. These depend upon which camp you are in. Folks in the crypto world note that higher rates and the difficulty the US has in paying its debts will make the dollar weaker. That will make Bitcoin the rest stronger. https://youtu.be/GAt9yWQSNYo

1. By: www.ProfitableInvestingTips.com

2. There are two sets of opinions about whether
higher interest rates help or hurt crypto. These
depend upon which camp you are in. Folks in
the crypto world note that higher rates and the
difficulty the US has in paying its debts will
make the dollar weaker. That will make Bitcoin
and the rest stronger.

3. Folks in the banking part of traditional finance
note that when interest rates go up, currencies
get stronger. The dollar goes up while Bitcoin
and the rest go down because of higher interest
rates. So, do higher interest rates help or hurt
crypto?

4. Banking’s View of Interest Rates and Crypto

5. Bankrate writes about Fed impacts on stocks,
investments in general, and crypto.
Specifically, they are talking about when the
US Federal Reserve raises or lowers interest
rates.

6. When the US experienced the highest inflation in
forty years, the Fed started to raise interest
rates. Higher rates and the prospect of ever-
higher rates has weighed on markets for a
couple of years. Finally, in June of 2023, the Fed
paused with its rate hikes due to inflation
having improved.

7. For all of that time, rate increases have affected
world currencies, commodities like oil, stocks,
and, yes, cryptocurrencies. If you have been in
hibernation since late 2021 you have missed
crypto winter which essentially gutted the
crypto industry. Bankers now speculate on
what comes next. Investors, especially in the
stock market, always worry about higher
interest rates. Now that rates have likely
peaked, the stock market is less worried.

8. A legitimate worry at this point is not that the Fed
will be raising rates but that continual
borrowing by the US treasury will drive rates
up. This is a problem because the US does not
live within its means and continually borrows.

9. Meanwhile, the nation is always flirting with
government shutdowns and not paying its
debts. That does not please those who have
typically trusted the dollar as the safest
investment. Bankers still see higher rates as bad
for stocks and crypto. The crypto world says, “I
told you so,” and sees crypto benefitting over
the long term.

11. Crypto Will Rise As Currencies Devalue

12. Coinbase writes about ratings agencies like Fitch
downgrading US debt. This tends to lead to
rising U.S. interest rates. The point that they
make is that one should not look at the short
term and how higher rates make the dollar
stronger and crypto weaker. One should look
at how all of this affects the purchasing power
of the dollar and other currencies. The US
keeps borrowing and printing money.

13. Over the long term this devalues the dollar and
helps crypto. This is because a cryptocurrency
like Bitcoin has an internally defined limit to
how many can ever be produced or mined.
Bitcoin is also not the vehicle responsible for
digging the US out of its financial hole. It is not
the vehicle necessary for financing the role of
the US as the policeman of the world. The
factors that drive interest rates up are tied to
the factors that will drive up crypto and drive
down the dollar over the long term.

14. Which Is the Riskier Asset?

15. Where is the risk worse today? Is it with Bitcoin
or is it with the US dollar? Investors are driven
by where they see profit potential and where
they see risk. For several years interest rates
were at rock bottom and investors saw profit
potential in stocks and cryptocurrencies. When
the Fed jacked up interest rates, stocks and
crypto became risky. Going forward, which is
riskier, crypto or the dollar?

16. When we see the US House of Representatives fire
their Speaker and essentially go out of business,
that does not instill confidence in the US
government or the dollar. When we see the US
supporting Ukraine against Russia we may feel
that democracy is safer. But, we wonder about the
cost and how much extra debt this will add to the
equation. Despite issues of regulation, crypto
excesses, there is still a place for Bitcoin and the
fact that they will not be mining more and more of
them forever and ever.

17. For more insights and useful information about
investments and investing, visit
www.ProfitableInvestingTips.com.