What does a Fed rate hike mean for bitcoin prices?

• BTC-USD

In this episode, Scott Melker explains how an interest rate hike from the Federal Reserve could impact bitcoin (BTC-USD) and crypto in the short and long term.

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Now, people always are asking what does this all mean for Bitcoin?

First of all, when rates go up, people generally view it as a risk to risk assets because liquidity tightens, which by the way, the bond market is already doing for them anyways, which is why we talk about fiscal dominance.

But short-term is bad for risk assets.

But there is a world where a credible rate hike, credible rate hike, without saying there’s going to be a ton of hikes or a new cycle, if there if he gives an indication there might just be one hike

and it could help manage inflation and inflation’s temporary because of diesel and gas prices, that kind of thing.

That could actually calm the longer-term yields that Bessent is so concerned about, and that could eventually create room for cuts.

If we get an indication that we’re going into a hiking cycle, I would say that all bets uh are are off here.

Bessent wants one thing, Trump wants one thing, the market wants one thing, they’re pricing it in and it can get very, very strange.

I mean, a hike can be painful now, but it could actually be stabilizing later.

And a hold on rates could feel bullish uh while making the long-term credibility problem worse.

I mean, we’ve seen these things before where the market does what you think it should do based on the decision and then goes back entirely the opposite way after the news hits.

Source: finance.yahoo.com