The current market needs to pay attention to the Federal Reserve's 'tapering' event. In the past week or so, U.S. bank reserves have decreased by approximately $320 billion!

1. In terms of price decline

- When the Federal Reserve tapers, U.S. dollar liquidity decreases and the dollar exchange rate remains strong, leading funds to flow toward safer dollar-denominated assets. Bitcoin, as a risk asset, may see its market funds withdrawn. Investors will move their funds from the Bitcoin market to dollar assets or government bonds and other relatively stable investment areas, resulting in downward pressure on Bitcoin prices.

2. In terms of market confidence

- The dollar inflow and dollar shortage caused by tapering will make market sentiment cautious. Investor confidence in the Bitcoin market may be impacted, as the overall risk appetite in the financial market declines. For assets like Bitcoin, which have significant price volatility and uncertain regulatory environments, investors often reduce their holdings during unstable market periods, thereby affecting Bitcoin's market demand and price.

3. In terms of long-term uncertainty

- However, in the long run, the Bitcoin market also has its own characteristics. Its decentralization and limited supply may attract some investors to a certain extent. If Bitcoin can prove its value storage function during periods of economic instability, similar to the role of gold during economic turmoil, some funds may continue to stay in the Bitcoin market or flow back in. But this scenario requires the Bitcoin market to mature continuously and be recognized by more mainstream investors for its value stability. Currently, at the early stage of the Federal Reserve's tapering, the Bitcoin market is likely to still be negatively impacted.