Correlation: Interest Rates vs. Crypto

Historical analysis of how Federal Reserve policy decisions and rate hikes have historically dictated crypto market sentiment.

The top 3

  1. The 2022 Tightening Cycle: The Fed's aggressive rate hikes starting in 2022 led to a 70%+ drawdown in major crypto assets as liquidity exited risky markets.
  2. The 'Risk-On' Sensitivity: Data shows that crypto assets often behave like high-growth tech stocks, showing a high positive correlation to Nasdaq 100 during rate changes.
  3. The Shift in Safe Haven Status: Recent trends indicate crypto is struggling to establish itself as an inflation hedge, moving more in lockstep with traditional equities under rate pressure.

Sources

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