Analysis of the Impact of The Federal Reserve (FED) Interest Rate Hikes on the Crypto Assets Market

Introduction

The Federal Reserve's interest rate hike policy has triggered turbulence in the cryptocurrency market, with significant challenges expected in the digital asset sector by 2025. Bitcoin's price has soared to $100,000, while stricter regulations have led to the exit of multiple projects from the U.S. market. This article provides an in-depth analysis of the impact of U.S. economic policy on virtual currencies, exploring how blockchain entrepreneurs can break through during the funding winter and offering valuable insights for investors.

Federal Reserve Interest Rate Hike Policy: Triggering Volatility in the Cryptocurrency Market

The Federal Reserve's interest rate hike policy has had a profound impact on the cryptocurrency market. In 2025, the Federal Reserve continued to adjust interest rates, triggering significant volatility in the cryptocurrency market. This policy not only affected traditional financial markets but also had a notable impact on the digital asset sector. The relationship between the cryptocurrency market and U.S. economic policy is becoming increasingly close, and investors need to closely monitor the interactions between the two.

As interest rates rise, investors are beginning to reassess the investment value of high-risk assets. Cryptocurrency, as an emerging investment category, has become even more volatile in this environment. Data shows that since the Federal Reserve announced the latest round of interest rate hikes, Bitcoin's price has fluctuated by 0.92% within 24 hours, while Ethereum's fluctuation has reached as high as 1.5%. This severe market reaction highlights the sensitivity of cryptocurrencies to macroeconomic policies.

The Battle Between Bitcoin and the US Dollar: Revaluation of Digital Asset Value Amid Inflation

Under the pressure of inflation in the US dollar, Bitcoin's position as digital gold is being reevaluated. As of July 7, 2025, the price of Bitcoin has reached $109,075.92, with a total market capitalization of $2,169,389,139,772.00. This data reflects investors' confidence in Bitcoin as a hedge against inflation. However, the strong position of the US dollar remains unshakeable, and the game between the two continues.

Comparison of Bitcoin and the US Dollar:

| Indicator | Bitcoin | US Dollar | |------|--------|------| | Inflation Rate | Fixed issuance, deflationary nature | Variable, influenced by central bank policies | | Market Acceptance | Continually improving, but still limited | Widely used globally | | Price Volatility | High | Relatively Stable | | Regulatory Level | Gradually Strengthen | Highly Regulated |

Regulatory Storm Approaches: The Impact of U.S. Financial Policy on Virtual Currencies

The adjustment of U.S. financial policy directly affects the regulatory environment for virtual currencies. With the advancement of the interest rate hike cycle, regulatory agencies' attention to the cryptocurrency market has also increased. The U.S. Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC) have intensified their regulation of digital assets, which has had a profound impact on the market.

The tightening of regulatory policies has led to some cryptocurrency projects facing compliance pressures. Data shows that in the first half of 2025, over 50 cryptocurrency projects were forced to exit the U.S. market due to non-compliance with regulatory requirements. This trend highlights the close relationship between virtual currency regulation and U.S. financial policy.

Conclusion

The Federal Reserve's interest rate hike policy triggered severe fluctuations in the cryptocurrency market in 2025, with Bitcoin prices breaking the $100,000 mark. Stricter regulations led to multiple projects exiting the U.S. market, and blockchain entrepreneurs faced financing difficulties. However, DeFi platforms provided new financing channels for projects. The close connection between the cryptocurrency market and U.S. economic policy has become increasingly prominent, and investors need to carefully assess risks, focusing on the intrinsic value of projects and their long-term development potential.

Risk Warning: Market fluctuations may exceed expectations, and changes in regulatory policies could lead to significant declines in cryptocurrency prices. Investors should make decisions with caution.