it's ironic that bitcoin which was supposed to free us from the legacy system is at the mercy of the FED. I hope that it will actually decouple from the markets once the system crashes. There is an argument to be made that whatever the FED will do it will crash the system: raising rates will lead to the crash, QE will put us into hyperinflation... But all of this is actually bullish for cryptos as it leaves a door open for an alternate path
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Well, the fed does not control bitcoin, but if government bonds offer a safer yield, then people with a lot of money, who do control the price of bitcoin as supply and demand, will move into bonds.
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When risk off is on the table, you are right, the whales move away from the risky stuff like BTC to something more conservative.
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Or they wait for prices to bottom out and buy very cheaply.
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Actually QE doesnt cause this since the money doesnt get out into the general economy. It is actually backwards. QE locks money into the banking and financial system which can send some assets up but general prices will not respond since the average person cannot hold Reserves printed by the Fed.
Of course, stopping food and energy production like the politicians did will always lead to higher prices.
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good point