📊 Why THIS affects crypto (very important)
This situation hits crypto in two opposite ways:
🔴 Bearish forces
• Rising oil → inflation ↑
When oil goes up ,everything goes up.
• Inflation → interest rates stay high
When inflation is high banks offer higher interest rates to adjust for inflation
• High rates → less liquidity → crypto fall
When interest rates are high you will put your money in the bank and not buy more crypto therefore crypto prices fall
🟢 Bullish forces
• War uncertainty → people move to alternative assets
People will invest in non physical assets like crypto and addition to gold and commodities
• Bitcoin sometimes acts like “digital gold”
People will therefore buy more of bitcoin as a store for their money.
• If trust in governments drops → crypto demand rises
People buying more crypto means the price of crypto will go higher