Recently, something happened in the crypto world. A well-known figure went all-in on Ethereum with $33.08 million, betting on a Federal Reserve rate cut. And what was the result? The rate cut indeed happened, but within 24 hours, 100,000 traders got liquidated, over $200 million in funds vanished into thin air, and that $30+ million was no exception.

Ultimately, this reflects one of the most brutal rules in the crypto space — it’s never the event itself that matters, but the market’s expectation of the event.

Retail traders think very straightforwardly: Fed rate cut → positive signal → buy in. But institutions operate completely differently: they position themselves in advance during the anticipation phase, then sell off when retail enters. It’s classic “buy the rumor, sell the fact,” every time.

Look at what recently happened: at the end of October, Bitcoin surged to around 110,000, and the market started frantically speculating about a rate cut in December. When the December expectation failed to materialize in November, BTC suddenly dropped to 80,000. Then, in the early hours of December 11, when the Fed announced the rate cut, retail traders got excited by the good news and frantically bought at 95,000. Within 24 hours, BTC continued to fall to 89,000, and another 100,000 traders got liquidated.

The difference is this — retail traders are trading based on already realized facts, while institutions had already completed their positions during the anticipation phase. The time gap in cognition is the deadly risk.

Even more ironic, the Fed Chair added fuel to the fire: there might only be one rate cut in 2026. The market had expected 2 to 3 cuts throughout the year, but now that expectation is shattered, liquidity outlook turns pessimistic, and crypto prices remain under pressure.

Retail traders get hyped when they hear about rate cuts, but institutions see signals of long-term tightening. When this cognitive gap appears, retail traders are doomed to get caught when the risk hits.

The real key still lies in global liquidity. The moves of the Bank of Japan have a bigger impact than the Fed’s rate cuts — when global liquidity tightens, the Fed’s small liquidity injections can’t hold up the market. If the Bank of Japan actually raises interest rates later, the crypto market will face a new wave of shocks.

So remember this: when the whole network is shouting about some positive news, that news has already been priced in. The moment you rush in, others are already preparing to sell. The true opportunity in crypto is before the news breaks, not after it lands. Don’t rush to buy the dip; the market is always one step ahead of you.