An equity has cash flows. You can argue about the discount rate applied to them, but there is something being discounted. An asset with no cash flows is priced on liquidity conditions and risk appetite alone, which makes the discount rate almost the entire story.
So when the cost of money changes, crypto reprices — not because of anything about the asset, but because the alternative to holding it changed.
The mechanism, plainly
Higher rates make holding cash pay, which raises the bar for any asset that does not. They also raise the cost of leverage, and crypto is a market where a great deal of the marginal buying is levered — the argument in system leverage versus your own.
Lower rates run the reverse. Financing cheapens, cash pays nothing, and the marginal buyer can carry more.
Why the correlation is unstable
Crypto trades as a high-beta risk asset most of the time and occasionally decouples entirely, usually on something specific to the asset class. Which means any measured correlation is regime-dependent, and a number computed over a long window averages together periods that behaved completely differently — the same problem as measuring realised volatility over the wrong window.
The honest statement is that crypto is usually correlated to risk appetite and sometimes is not, and that the exceptions are what people remember.
What it changes for a structure reader
Not much day to day, and quite a lot for regime. A tightening cycle is an environment where leverage is expensive and gets rebuilt more slowly after a flush. An easing one is where it accumulates faster.
So the rates backdrop is context for how quickly the fuel comes back, which is a slower-moving question than anything on a dealer map and worth knowing when interpreting one.
The discipline
Macro sets the backdrop and never the entry. It is the same rule as scheduled events: it widens or narrows the band, and it does not tell you direction on any timeframe you can trade.