Fed Rate Hike Won't Spark Crypto Crash, Grayscale Warns
Crypto asset management company Grayscale has assessed that the impact of the US Federal Reserve's recent interest rate hike on the cryptocurrency market may be limited. According to Grayscale, this move is an interim adjustment within the current economic cycle and does not signify the beginning of a new interest rate cycle.
The company pointed out that a similar interest rate hike occurred in 1997 and had a limited impact on asset markets. Based on this historical example, Grayscale stated that the latest interest rate increase is not expected to lead to a large-scale change in the cryptocurrency market.
However, Grayscale warned investors to focus more closely on stablecoin issuers such as Circle and Tether. The company noted that interest income from reserve assets constitutes a significant portion of their revenue structure, and rising interest rates can contribute to increased interest income earned by these companies.