Over the past two years, rising interest rates have had a significant impact on commodities such as stocks, cryptocurrencies, and oil.
Expectations of higher interest rates have affected the markets for over two years, reaching a key moment in mid-2023. The Federal Reserve kept them stable in eight out of its last nine meetings, including the one held on June 12, after raising them 11 times during the last economic cycle.
Currently, few analysts doubt that interest rates will start to decline while inflation, which rose to 3.3% in May, continues to be controlled. The major asset classes have reacted differently to higher interest rates.
Cryptocurrency prices declined along with other high-risk assets, while many commodities, including oil, increased in early 2022, although these jumps were short-lived. As the increase in interest rates on Federal Reserve funds slowed down and then stopped in 2023, it appears that both oil and cryptocurrencies have stabilized.
Read more:
Ripple executive says XRP is definitely not a security
Furthermore, cryptocurrency values declined along with other risky assets when the Federal Reserve announced its intention to raise interest rates in November 2021 and throughout 2022.
However, instability in the banking sector led many traders to turn to them, believing that future interest rate increases would be less aggressive. As the interest rates on 10-year government bonds reached their peak in October 2023 and subsequently declined, riskier assets became more expensive.
