Part 8/14:
Changes in government spending, inflation, and interest rates are pivotal. Rising inflation often leads to aggressive rate hikes, which can depress risk assets. Conversely, policies promoting liquidity—such as quantitative easing—tend to boost crypto prices.
In the U.S., public data like the government deficit or Federal Reserve’s rate decisions provide insight into liquidity conditions. When government deficits increase, they often signal more money entering the economy, which can be bullish for crypto.