Yes, you're right that the Fed was raising rates during Bitcoin's 2017 bull market, but the context today is quite different.
Bitcoin in 2025 is much more integrated with the broader financial system than it was in 2017. Institutional investors now drive a significant portion of market flows, and these players tend to treat Bitcoin as a risk asset in their portfolios.
If the Fed adopts a more hawkish stance by pausing rate cuts or raising rates, this would likely signal to institutional investors that conditions are becoming less favourable for risk assets generally. This could result in reduced inflows to Bitcoin at best, or at worst, trigger a broader de-risking event where institutions reduce exposure to both crypto and growth stocks simultaneously.
This isn't guaranteed to happen, of course, but it represents a meaningful risk factor that prudent investors should consider in the current market environment, unlike in 2017 when institutional participation was minimal.
Superb work as usual! Thank you very much for sharing! I intend to feature your work in this week's edition of CryptoCurated! ♥️☀️☮️🌈🏁
You say that fed pausing rate cuts, or even raising, would be bad for Bitcoin. Wasn’t the fed raising rates during the 2017 Bitcoin bull market?
Yes, you're right that the Fed was raising rates during Bitcoin's 2017 bull market, but the context today is quite different.
Bitcoin in 2025 is much more integrated with the broader financial system than it was in 2017. Institutional investors now drive a significant portion of market flows, and these players tend to treat Bitcoin as a risk asset in their portfolios.
If the Fed adopts a more hawkish stance by pausing rate cuts or raising rates, this would likely signal to institutional investors that conditions are becoming less favourable for risk assets generally. This could result in reduced inflows to Bitcoin at best, or at worst, trigger a broader de-risking event where institutions reduce exposure to both crypto and growth stocks simultaneously.
This isn't guaranteed to happen, of course, but it represents a meaningful risk factor that prudent investors should consider in the current market environment, unlike in 2017 when institutional participation was minimal.
Cheers,
Nick