Next, let's talk about the impact of the Fed's rate cut on the cryptocurrency market in the long run!
Increased capital inflows: A low interest rate environment may prompt investors to seek higher returns and thus flow into the cryptocurrency market.
Bitcoin's safe-haven asset characteristics: Rate cuts may enhance Bitcoin's appeal as "digital gold", prompting more people to regard it as a hedge.
Expectations of fiat currency depreciation: Rate cuts usually trigger concerns about fiat currency depreciation and increase demand for cryptocurrencies as a means of storing value.
Increased trading activity: Low borrowing costs may make investors more willing to participate in transactions and increase market activity.
The impact of the Fed's rate cut on the cryptocurrency market in the short term!
First of all, no one knows how much the rate cut meeting will be in the early morning! 25%, 50%, or maintaining a high interest rate of 5.5%! All of the above situations are possible! !
I have reminded you many times on Weibo before that there was a big wave before the Fed cut interest rates, and BTC has been shouting a big positive line at 52,000, 53,000, and 54,000. Hold it! ! ! Some of my friends who traded in the spot market followed suit and got the results!
Interest rate cuts are good in the long run, but in the short term, if the rate cut is too large, it may cause panic in the market. Many institutions and individuals will speculate whether the United States is at risk of economic recession or whether the economy is failing, triggering a series of chain reactions, that is, the stampede caused by the butterfly effect!