According to the report penned by Robbie Liu and Yuanming Qiu, analysts of the crypto and financial services provider Babel Finance; The market response of various assets was looked at during the three interest rate announcements in the US this year on May 4, March 16 and January 26.

According to the report in question, although Bitcoin is closely related to traditional assets such as the S&P 500 stock index, it has a better effect in mitigating the effects than digital assets such as Ethereum's ETH token. Analysts say:

   "In summary, Bitcoin's performance on the stated dates demonstrates the asset's ability to mitigate the economic effects of monetary issues compared to the US stock market and ETH.".

As a possible explanation for this, the report pointed out that a significant proportion of Bitcoin holders have always relied on the asset store of value properties and inflation hedging narrative. As a result, the report stated that despite the decline in other risk assets, the majority of Bitcoin holders prefer to hold the asset.


The moderate response of the Bitcoin market came as Bitcoin has exhibited unprecedentedly similar moves to the US stock market since May 2020. According to the report, on May 6, 2022, the 30-day correlation reached about 0.8, the highest correlation since July 2017.

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The report said it is unclear whether Bitcoin has bottomed out in the current bear cycle when it comes to what to expect next.

   “Some analysts are looking for signs of a Bitcoin bottom, but this report does not answer whether the 'buy from the bottom' strategy is a good idea right now.”

Instead of trying to predict a bottom for Bitcoin, the report revealed that even as its price drops and its correlation with other risk assets remains high, the digital asset's store-of-value property is "not entirely diminished."

   "As always, Bitcoin's long-term narratives are not easily shaken by another price drop. Those who truly believe are still building something."