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Volume 18
Issue 7
10.3390/jrfm18070393
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Article

The Impact of the Fed’s Monetary Policy on Cryptocurrencies: Novel Policy Implications for Central Banks

by
Tayfun Tuncay Tosun
1,* and
Erginbay Uğurlu
2
1
Department of International Trade and Finance, Istanbul Aydın University, Istanbul 34295, Türkiye
2
Department of Economics and Finance, Istanbul Aydın University, Istanbul 34295, Türkiye
*
Author to whom correspondence should be addressed.
J. Risk Financ. Manag. 2025, 18(7), 393; https://doi.org/10.3390/jrfm18070393
Submission received: 15 June 2025 / Revised: 9 July 2025 / Accepted: 12 July 2025 / Published: 16 July 2025
(This article belongs to the Special Issue The Future of Money: Central Bank Digital Currencies, Cryptocurrencies and Stablecoins)
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Abstract

This study aims to analyze the impact of the U.S. Federal Reserve System’s monetary policy on major cryptocurrencies. Specifically, it explores whether the effects differ between volatile cryptocurrencies, such as Bitcoin and Ethereum, and the stablecoin Tether. To this end, we utilize an autoregressive distributed lag (ARDL) bounds testing approach, analyzing monthly data from January 2019 to April 2025. The empirical results indicate that the responses of volatile and stable cryptocurrencies to the Fed’s monetary policy differ. In the long term, the prices of Bitcoin and Ethereum tend to react positively to the Fed’s monetary policy changes, whereas Tether’s prices experience a negative impact. We recommend novel policy implications in this study based on these empirical findings.
Keywords: bitcoin; Ethereum; tether; fed; ARDL model bitcoin; Ethereum; tether; fed; ARDL model
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MDPI and ACS Style

Tosun, T.T.; Uğurlu, E. The Impact of the Fed’s Monetary Policy on Cryptocurrencies: Novel Policy Implications for Central Banks. J. Risk Financ. Manag. 2025, 18, 393. https://doi.org/10.3390/jrfm18070393

AMA Style

Tosun TT, Uğurlu E. The Impact of the Fed’s Monetary Policy on Cryptocurrencies: Novel Policy Implications for Central Banks. Journal of Risk and Financial Management. 2025; 18(7):393. https://doi.org/10.3390/jrfm18070393

Chicago/Turabian Style

Tosun, Tayfun Tuncay, and Erginbay Uğurlu. 2025. "The Impact of the Fed’s Monetary Policy on Cryptocurrencies: Novel Policy Implications for Central Banks" Journal of Risk and Financial Management 18, no. 7: 393. https://doi.org/10.3390/jrfm18070393

APA Style

Tosun, T. T., & Uğurlu, E. (2025). The Impact of the Fed’s Monetary Policy on Cryptocurrencies: Novel Policy Implications for Central Banks. Journal of Risk and Financial Management, 18(7), 393. https://doi.org/10.3390/jrfm18070393

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