Recently, the Federal Reserve has begun to cut interest rates. Why is the interest rate cut good for cryptocurrencies? Why will cryptocurrencies rise? I will not analyze it this weekend. Let's use plain language to interpret it for everyone!

First of all, let's talk about why it is good for cryptocurrencies. At present, the mainstream settlement currency of the world economy is still mainly US dollars. Well, first of all, let's not consider the liquid cash. As for the stock funds, the money of rich people is alive, and they will consider the annualized rate of return! These money will be deposited in American banks when the Federal Reserve's interest rate is high. Then the Federal Reserve's interest rate cut means a lower rate of return, and funds will flow out of banks and enter other financial markets! This is also one of the reasons for the rise of cryptocurrencies! Secondly, the adjustment of exchange rates in various countries will also make big holders of US dollars consider how to hedge against the depreciation of the US dollar! For example, the recent RMB against the US dollar has fallen to 7, the highest position is 7.3, a drop of nearly 5 points! If you don't hedge here, or invest in financial products, then the continued interest rate cuts will further depreciate! So this also brings certain benefits to the crypto market! As for how long this benefit can last, the November interest rate decision can basically be seen! The initial rate cut is 50%, and it is expected that the entire rate cut cycle will take more than 1 year! Normally, the entire rate cut cycle is a bull market!

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