The cryptocurrency market is increasingly tied to global economic policy. In 2025, rising interest rates across major economies are putting pressure on Bitcoin and other digital assets.
As central banks signal tighter monetary policies to combat inflation, investors are pulling capital away from risk assets like crypto. This shift has contributed to heightened volatility and sudden liquidations.
Historically, Bitcoin has thrived in liquidity-driven environments, where cheap money fuels speculative demand. However, when rates rise, investors tend to move toward safer assets such as bonds and cash.
Despite short-term challenges, Bitcoin advocates argue that its scarcity and decentralization make it a strong hedge against inflation in the long run. The key for investors now is to monitor central bank policy, inflation data, and global risk sentiment, all of which will continue to shape crypto’s future.
