Easy Analysis of the Cryptocurrency Market Under the U.S. Rate Cut

Considering the impact of the U.S. rate cut, the trend of the cryptocurrency market (represented by BTC) is mainly influenced by two factors: liquidity and risk expectations.
：
Benefits of the rate cut:
A U.S. rate cut will make money in the market more "loose," lowering the cost of borrowing from banks. People will have more idle funds to seek higher-yield investments, and cryptocurrencies are high-risk, high-reward assets. Capital inflows will push up the prices of currencies like BTC.
The Federal Reserve's rate cut will also print more USD. In the face of inflation, many will see BTC as an "inflation hedge," which will also boost demand for cryptocurrencies. In the short term, BTC prices are likely to rise.
Hidden risks:
Rate cuts are not a cure-all. If the rate cut leads to worsening inflation, the Federal Reserve might reverse course and raise interest rates again. Market liquidity will tighten, and the enthusiasm for cryptocurrencies will decrease accordingly, making prices prone to decline.
The cryptocurrency market itself is highly volatile. If global economic liquidity tightens due to debt issues caused by the rate cut, investors may panic and sell high-risk crypto assets, which will also suppress BTC's price volatility.
Indirect impact of tariffs:
The negative effects of China-U.S. trade tariffs (such as rising commodity prices and higher corporate costs) may increase risk aversion in the market, with some funds flowing into cryptocurrencies for preservation. However, if tariffs trigger disruptions in the global supply chain and weaken the economy, overall investment appetite will decline, dragging down the crypto market as well.
#美联储降息预测