Bitcoin tends to benefit from Federal Reserve rate cuts and a weakening U.S. dollar. Lower interest rates make traditional fixed-income investments less attractive, driving investors toward alternative assets like Bitcoin. Additionally, rate cuts often signal economic uncertainty or efforts to stimulate growth, which can increase demand for Bitcoin as a hedge against inflation and currency debasement. A weaker U.S. dollar further strengthens Bitcoin’s appeal. Since Bitcoin is priced in USD, a declining dollar increases its relative value. Moreover, investors may seek Bitcoin as a store of value if they lose confidence in fiat currency. Historical trends show that Bitcoin often rallies following Fed rate cuts, as seen in 2020 during the pandemic-driven stimulus measures. However, Bitcoin’s reaction isn’t always immediate or uniform. Other factors, such as regulatory developments, market sentiment, and global liquidity conditions, also play a role. If economic instability accompanies rate cuts, risk aversion could lead to short-term Bitcoin sell-offs before a potential long-term rally.