Fed Rate Hike Sparks Liquidity Crunch, Crypto Price Slump

The Federal Reserve's decision to raise interest rates by 25 basis points to 3.75-4.00% in September marks a significant shift from a year of rate-cut expectations.

This change has far-reaching implications for the cryptocurrency market, as low rates loosen liquidity and push investors toward riskier assets, while high rates tighten it and pull money toward safer ground.

Crypto assets like Bitcoin have historically performed poorly in a hiking cycle due to the increased cost of holding something that pays no interest. This trend is likely to continue as long as interest rates remain high.