How does a central bank's monetary policy affect the economy?

Central banks control the money supply and interest rates to manage economic growth and inflation. When they lower interest rates, borrowing becomes cheaper, encouraging spending and investment, which can stimulate economic growth. Conversely, raising rates makes borrowing more expensive, cooling down inflation but potentially slowing growth. These policies affect cryptocurrency markets indirectly: lower rates often increase risk appetite, pushing money toward crypto assets, while rate hikes can reduce crypto demand as investors seek safer investments. Additionally, quantitative easing (printing money) may drive crypto adoption as people seek alternatives to devaluing fiat currencies.