How Interest Rates Drove Crypto’s Biggest Moves in 2024

Interest rates may seem like something only stock market analysts and economists worry about, but in reality, they have a huge impact on crypto markets. The Federal Reserve’s decisions can send Bitcoin soaring or crashing within minutes, leaving traders scrambling to adjust.

If you were watching the markets in 2024, you probably saw how the Fed’s rate cuts played out in real-time — from record highs to unexpected dips. Understanding why this happens can help crypto traders make informed decisions rather than just reacting to market noise.

Let’s break down what happened and what traders should take from it.

While cryptocurrencies operate outside traditional banking systems, they are heavily influenced by macroeconomic factors — especially central bank policies. Here’s why:

• Lower interest rates reduce the cost of borrowing, increasing liquidity and encouraging investment in riskier assets like Bitcoin.
• Higher interest rates make traditional savings and bonds more attractive, potentially diverting funds away from the crypto market.
• Market expectations about rate changes can lead to price swings even before the official…