Stablecoins, the Beating Heart of Crypto Markets

Macro

Layer 1

17/11/2025

Given the current macroeconomic context, we are seeing the emergence of two major risks likely to have a decisive impact. Firstly, the risk linked to the interest rate cycle, a combination of persistent inflation and a still uncertain monetary policy trajectory. Secondly, the rise in AI-related valuations exposes the market to the risk of a sharp rebalancing.

Navigating Fed Fears & AI Bubble Bursting

by Adam Morgan McCarthy AND thOMAS PROBST

The relationship between Fed interest rates and the price of Bitcoin has been characterized by a negative correlation. Indeed, rate hikes or expectations of more restrictive monetary policy toughen the economic climate and reduce the appetite for volatile, high-beta assets, which directly impacts BTC. Conversely, cycles of easing support liquidity, which tends to support prices too. Thus, when interest rates rise, the price of Bitcoin falls, and in contrast, when interest rates fall, the price of Bitcoin rises.

The current macroeconomic context perfectly reflects this dependence. When Federal Reserve Chair Lisa Cook stated that the expected December rate cut wasn’t 100% certain, the price of Bitcoin experienced a significant crash. This episode highlights how changes in interest rate expectations, even without concrete policy intervention, can make investors doubt and trigger significant movements in cryptocurrency markets.

If such a small statement can cause an outsized market reaction, a scenario where rates are maintained for longer, or even increased, would likely exert a far stronger and more persistent drag on liquidity and risk appetite.

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Data Used In This Analysis

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