cryptotamil

🚀 What is the Fed meeting? Why does it shake up the crypto market? Let’s understand it simply! 🧵 (IMPORTANT UPDATES ):
👉 Have you ever wondered why crypto traders get so anxious and keep talking about the "Fed Meeting"? Let me explain it to you very simply!

🔎 What is the US Fed meeting? 🚨

👉 The US Federal Reserve (Fed) is America's central bank (much like our RBI). They meet eight times a year to make a crucial decision: setting interest rates.
👉 In the US, if inflation is very high, they raise interest rates to bring it down. If the economy is sluggish, they lower interest rates.⏳

📊 How does this impact crypto? (Fed vs. Crypto) :

The crypto market relies entirely on the flow of public capital (liquidity). The decision taken by the Fed will impact crypto in two ways:

📉 1. Interest Rate Hike (A major blow to crypto): 👉 When interest rates rise, banks offer attractive returns (interest). Consequently, people become hesitant to invest in high-risk areas like cryptocurrency and the stock market; instead, they prefer to withdraw their funds and save them securely in banks. As the flow of money into the market decreases, the price of cryptocurrency falls.
📈 2. If interest rates drop (Rate Cut – a boon for crypto):
👉 When banks lower interest rates, people realize that keeping money there won't yield significant returns. Consequently, they withdraw their funds from banks and start investing in assets like crypto and stocks that offer higher profits. As fresh capital flows into the market, the price of cryptocurrency skyrockets!
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