The Fed is about to cut interest rates again. Can the crypto market really take off this time?

Recently, there's been talk that the Federal Reserve might restart interest rate cuts. Every time there's movement in monetary policy, the crypto market gets restless—could this be the prelude to another big rally?

Let's start with the most direct point: cutting interest rates means more liquidity. When interest rates go down, saving money in the bank is less attractive, bond yields shrink, and funds seeking higher returns naturally look elsewhere. Cryptocurrency, as a high-risk and high-reward asset, has always been a "candidate pool" for this type of capital. Looking back at the 2020 rate cut cycle, Bitcoin surged from a few thousand dollars to tens of thousands, fueled by both liquidity and sentiment. The market was bound to get hot.

There’s also a deeper logic: with a rate-cutting cycle, people become more worried about fiat currency devaluation. At this time, the "digital gold" narrative of Bitcoin becomes even more appealing, especially to institutional investors, who might accelerate their allocation to crypto as a hedge against inflation.

But on the other hand, the crypto market has never relied solely on macro factors to rise. Regulatory policy direction, on-chain ecosystem innovation, and whether market sentiment overheats—these are equally critical. Rate cuts only provide a favorable environment; whether the market can truly develop in a healthy way depends on the industry's fundamentals.

So, this round of rate cut expectations has indeed given the market new imagination, but staying rational is always the top priority. In the next few months, it's worth closely watching how traditional finance and the crypto world interact.