Recently, there has been a lot of discussion: "Every time the major platforms raise interest rates, the crypto market drops. Is this an iron law?" and "What is the real relationship between Federal Reserve policies and the crypto market?" First, let’s clarify the conclusion — the so-called "synchronized fluctuations" you feel are 90% coincidental rather than inevitable.

It’s important to understand a fact: although crypto assets still carry the label of "risk assets," this does not mean their price movements must be entirely dictated by Federal Reserve policies. Many people treat "rate hikes lead to crypto declines" as an iron law, but they are actually confusing coincidence with causality. Looking at the 2022 bear market, many focused solely on the aggressive rate hikes by the Fed, but at the same time, there were industry shocks like the Terra ecosystem collapse and the FTX explosion.

I’ve analyzed a set of data: from 2020 to 2024, the Federal Reserve has raised interest rates 18 times in total, of which only 11 times did the crypto market decline on the same day. Even more interesting, there were 4 instances where rates were raised and the market rose instead, and 3 times where there was no significant movement. Counting it up, the probability that crypto and rate hikes move down together is less than 60%, so it cannot be considered an inevitable connection.

Looking deeper, Federal Reserve rate hikes change the global liquidity environment, but the sources of funds in the crypto market are very complex — including both traditional financial institutions’ capital inflows and internal industry funds. When traditional capital shrinks risk positions due to rate hikes, it can indeed withdraw some funds, causing short-term declines. That is a real occurrence. But the key point is that the independence of the crypto market is growing stronger, and the influence of macro factors is gradually weakening.