How can decisions by the U.S. Federal Reserve influence Bitcoin's price movements?
Why is this the correct answer?
This is correct because when the Federal Reserve signals or implements rate cuts, traditional financial assets like bonds and savings accounts yield less. Lower yields make Bitcoin relatively more appealing as an investment. Beginners should understand that Bitcoin competes with other assets: if interest rates are cut, returns on cash and bonds drop, so investors may shift some funds into Bitcoin, pushing its price up.
Related Terms
AI-Generated Content Disclaimer
Important Notice: This content has been generated with the assistance of artificial intelligence. While we strive for accuracy, there may be errors or inaccuracies in the information provided. Please exercise caution and verify any information before making decisions based on it. This information does not constitute investment advice, financial advice, trading advice, or any other sort of advice. You should not treat any of the content as such. CryptoMeteo does not recommend that any cryptocurrency should be bought, sold, or held by you. Always conduct your own due diligence and consult with a financial advisor before making any investment decisions.