Hi Guys,
The Federal Reserve has increased interest rates, The European Central Bank will stop QE, it seems the occidental economy is starting to grow.
Will it benfit the cryptocurrency market in his whole or it will drain money from it toward classic investments?
what do you guys think about it?
What's your opinion/analysis?
Increased interest rates do not make economy grow, as higher interest rates encourage people to lend money. At the same time, they make it difficult for entrepreneurs to borrow money.
When it´s hard to borrow money to make your own business the economy does not grow.
Usually government increases interest rates to reduce inflation rates and to attract money to the country.
This is why dollar is on a bull run, because everyone is buying dollar so they can invest in the US at high interest rates. There is no reason to invest in high risk countries, unless they increase even more their interest rates.
I think this higher interest rate may have a negative effect on crypto (not much) and a negative effect in stock market.
This is may be good opportunity to bonds in the US, so smart money may go that way.