What Will Happen To Bitcoin If Feds Raise Interest Rates Again? | July 2022

1 min read

Will BTC Rally Or Will Price Drop?

It’s one step forward and two steps back for the cryptocurrency market this year as Bitcoin barely generated profits. BTC rallies for a week and slips the next few weeks in a see-saw pattern testing the patience of investors. Just when Bitcoin saw a rally, reports about the Feds planning to raise interest rates are already doing the rounds.

The Feds might raise interest rates yet again for the third month in a row. The Feds meeting is scheduled to be held next week and reports state they plan to raise interest rates by another 0.75 percent. The development would affect a wide range of investments and borrowed loans. Bitcoin and the cryptocurrency market are now caught in the crossfire of a rally and the Feds interest rate hike.

Bitcoin Rally to End If Feds Raise Interest Rates?

bitcoin btc
Source: Pixabay

An interest rate hike adversely affects day-to-day life as buying a house or a car on loan becomes expensive. Though the 15 and 30 years mortgage rates are fixed, new buyers will have to shell out more to own the same house. CNBC estimated that potential new home buyers would end up paying between $29,160 to $39,240 more if the Feds raise 0.75 interest rates. Therefore, new homebuyers will have to bear additional burdens just to own a property of their choice.

In addition, car loans would face a similar condition as the average interest rates will move beyond 5%. Consumers would end up paying a minimum of $1,324 more when the interest rates are hiked.

Therefore, all these affect the average Joe directly at a time when there’s a recession looming. The purchasing power dips as expenses increase making the economy on the brink of turmoil.

The negative sentiment would affect the stock markets and eventually begin trading in the red. As Bitcoin and the crypto markets go in tandem with the stock market, a crash is inevitable.

In other words, the Feds raising interest rates yet again this month could be a recipe for disaster. Bitcoin could slump further and might take months to get back on track.

At press time, Bitcoin was trading at $22,825 and is down 3.7% in the 24 hours day trade. The leading crypto is up nearly 12% in the last 7 trading days.

 

Via this site