Goldman Sachs Says Bitcoin Will be More Exposed to FED Rate Hikes

As Bitcoin is getting more extensively used, global investment giant Goldman Sachs has warned that it will become increasingly vulnerable to rate hikes by the Federal Reserve. Goldman Sachs analysts explained, “Over the last two years, as Bitcoin has seen wider mainstream adoption, its correlation with macro assets has picked up.” Goldman Sachs released a research paper on Thursday highlighting Bitcoin’s increased sensitivity to interest rate hikes by the Federal Reserve. Zach Pandl, co-head of foreign exchange strategy at the bank, and FX analyst Isabella Rosenberg said that Bitcoin’s vulnerability to Fed policy will grow with Bitcoin usage. They explained: “Over the last two years, as Bitcoin has seen wider mainstream adoption, its correlation with macro assets has picked up.” Recently, technology stocks have been affected by higher bond yields, with the NASDAQ 100 index falling more than 13% this year. Analysts further said: “Bitcoin and other digital assets have likely suffered from the same forces … These assets will not be immune to macroeconomic forces, including central bank monetary tightening.” The FED is expected to raise interest rates five times this year. According to Goldman Sachs, the FED could hike interest rates at every meeting this year. The Federal Open Market Committee (FOMC) did not offer a precise schedule for the increase in its post-meeting statement last week. However, there are signs that it might h...