Federal Reserve interest rate hikes should do more than just raise the costs of credit card loans. They should also boost investors’ demand to earn money from lending their crypto holdings to other investors. Crypto lending, or yield farming, is already a booming activity offered by startups specializing in decentralized finance. It’s also recently become a target for regulators.
The Fed’s rate hikes will “absolutely” have an impact on crypto lending rates, said Robert Leshner, the founder of Compound Labs, which developed the Ethereum-based, decentralized crypto lending protocol Compound Finance.