The Federal Reserve's interest rate cut decision in December is like a fog, will it cut or not?
What impact will this decision have on the cryptocurrency market?
Firstly, regarding whether there will be an interest rate cut next month, Federal Reserve Chairman Powell did not provide a clear answer, which is indeed somewhat frustrating, as if he said something meaningless, offering no substantial guidance, leaving us to collect data extensively to make our own judgments.
Secondly, from a data perspective, while the probability of a 25 basis point rate cut by the Federal Reserve next month exceeds 50%, it has significantly decreased compared to the 80% probability stated before the November meeting. This seems to reveal the intention not to cut rates too quickly.
Thirdly, what the current Federal Reserve Chairman Powell and several key figures are focusing on is that interest rate cuts may trigger inflation, leading to over-stimulation of the market economy. After all, the productivity in the U.S. has already improved, and there are serious concerns about the severe market inflation that may arise from interest rate cuts. This concern indeed has some reference value; however, the problems faced by the U.S. are complex, and decisive action is still needed when it comes to cutting interest rates.
Fourthly, what will be the impact of the interest rate cut or not next month on the cryptocurrency market? Here, I would like to share my personal views with you. If there is a rate cut, it will be beneficial, as more funds will flow into the market, and market fluctuations will also be more liquid, injecting vitality into the market. If there is no rate cut, the overall impact on the market will not be too drastic; at most, at the moment the news is announced, speculators might use the news to slightly lower the market, but the market is still expected to maintain a bullish trend and will not directly enter a bear market. After all, the significant news will come when Trump takes office next year, and more favorable policies and news will surely be introduced then.
Fifthly, if the market falls, we should decisively buy the dip. The current price of Bitcoin has soared significantly, nearing $100,000, driven by institutional investors and even some political forces from certain countries. Their goal is to profit, and they are unlikely to destroy their own advantages before the price has risen significantly. Therefore, mainstream cryptocurrencies such as Bitcoin, Ethereum, Solana, Dogecoin, and Ripple present great buying opportunities once they drop.
Sixthly, for the vast number of retail investors, market opportunities often lie in times of undervaluation, allowing them to acquire cheap assets and more easily enter the market to share in the profits. While news is certainly key, one must not view the market as a casino. Currently, the legends of getting rich quickly in the cryptocurrency space are increasingly rare, and opportunities are becoming scarcer. We must maintain a long-term perspective, deeply consider how to establish a stable foothold in the cryptocurrency world, acquire our own wealth, and make good long-term survival plans, which is the wise approach.
