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If unemployment is high, the Federal Reserve may lower interest rates to stimulate the economy, leading to a decrease in the dollar and an increase in demand for Bitcoin as a hedge asset.
But if unemployment is low, the Federal Reserve may continue to raise interest rates, making the dollar stronger and putting pressure on Bitcoin and other digital assets.
What do the statistics say?
In 2020-2021:
With trillions of dollars pumped into the economy through stimulus packages and unemployment benefits, cryptocurrencies rose sharply.
We witnessed an increase in trading volumes, and the number of individuals from the middle and working class investing in Bitcoin increased.
In 2022-2023:
As interest rates began to rise and stimulus was reduced, cryptocurrency prices fell, and Bitcoin dropped from $69,000 to below $20,000.
There was a negative correlation between tightening monetary policy and the decline of risk assets, including stocks and cryptocurrencies.
In 2024-2025:
With the economy stabilizing and inflation decreasing, Bitcoin started to recover, especially with the launch of Bitcoin ETFs.
Recent data on unemployment benefits may determine the next trend for cryptocurrencies, especially if the Fed decides to ease its monetary policy.
Summary: Should we care about unemployment benefits as cryptocurrency investors?
Yes, because unemployment benefit data affects the Fed's monetary policy, which in turn affects the dollar and liquidity in the markets.
When unemployment is high, cryptocurrencies may rise due to expectations of the Fed easing its policies.
When unemployment is low, cryptocurrencies may face pressure due to expectations of interest rate hikes.
Smart investors are watching this indicator alongside Fed decisions and liquidity trends to make more informed decisions.
$ZKC #
