Next Thursday, the Federal Reserve will hold a rate meeting, which has attracted much attention because it may mark the first time in recent years that the Federal Reserve has turned to loose monetary policy, which will have a significant impact on the Bitcoin market.
1️⃣ Policy expectations and market reactions
Expectations of interest rate cuts: The market generally expects that this meeting will cut interest rates by at least 25 basis points, and may even cut by 50 basis points. The interest rate cut will increase market liquidity and may prompt capital to flow from low-risk assets to high-risk assets, and Bitcoin is expected to benefit from it.
Market reaction: The expectation of interest rate cuts has been digested by the market to a certain extent. If the actual interest rate cut is in line with expectations, market volatility may be relatively limited; but if the interest rate cut exceeds expectations, or the speech of Federal Reserve Chairman Powell reveals more key information, the market may have a greater reaction.
Forecast: It is expected that the Federal Reserve will cut interest rates by 25 basis points on September 14, and the market reaction may be relatively stable, but Powell's speech will become an important variable.
2️⃣ Bitcoin's correlation with US stocks
Current status: Bitcoin's recent performance is highly correlated with the Nasdaq index, which indicates that Bitcoin is seen as a high-volatility asset rather than a traditional safe-haven tool, especially after the listing of the Bitcoin ETF. ➕👗➩BNB0098
Possibility of decoupling: The correlation between Bitcoin and US stocks may decouple in the following cases:
Global emergencies: Major events such as war or sanctions may cause Bitcoin to demonstrate its safe-haven characteristics. However, the current international situation is unclear, and future emergencies are difficult to predict. Major positive or negative news in the currency circle: For example, if Trump wins the election and implements new policies that are beneficial to the currency circle, it may have a positive impact on Bitcoin; while Trump's defeat may have a negative impact.
