In the past, interest rate cuts have been a strong driver of Bitcoin’s growth. However, investment manager Jeff Park points out that another major shift may come in a completely different environment—with rising rates. That is when, according to him, Bitcoin’s role in the global financial system would definitely change.
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The end of a simple equation: lower rates = higher Bitcoin?
Jeff Park of ProCap Financial, in an interview with investor Anthony Pompliano, said that the market should rethink the long-held assumption that a bull market always goes hand in hand with loose monetary policy. According to him, the relationship between Bitcoin and the Fed’s decisions may gradually change.
Accommodative policy, i.e., lowering rates and supporting liquidity, has traditionally increased the attractiveness of risky assets. In such an environment, Bitcoin benefited from lower bond yields and the weakening purchasing power of fiat currencies. However, this model may not work forever.
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Growth at higher rates as a major turning point
Park calls a situation in which Bitcoin would grow even during monetary policy tightening the “holy grail.” Such a scenario would contradict the logic of quantitative easing (QE) and call into question the significance of the so-called risk-free rate as the main reference point for the market.
If Bitcoin were able to break free from its dependence on cheap money, it could be seen not only as a speculative asset but as an alternative to the existing monetary system. For now, however, this is more of a theoretical consideration than a trend confirmed by current market data, such as that from the TradingView platform.
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