The crypto market experienced a rebound last night, with Bitcoin reaching a peak of $61,300 and currently fluctuating around $60,200. Ethereum is fluctuating around $2,330.
Altcoins as a whole are also rising along with the broader market, with the MEME coin sector performing the strongest.
The news worth noting is:
1. The probability of the Fed cutting interest rates by 50 basis points is increasing
Yesterday, Nick, the mouthpiece of the Federal Reserve, sent a tweet mentioning the concept of "minimizing regret."
This concept has sparked widespread discussion in the market about the possibility of a 50 basis point interest rate cut by the Federal Reserve.
What is "regret minimization"?
Simply put, if the Fed chooses to cut interest rates by 50 basis points in September and may continue to cut interest rates in the future, the Fed will not regret this decision as long as the economy performs stably and there are no negative impacts before the November interest rate meeting.
But if they only cut rates by 25 basis points and economic conditions subsequently worsen, they may regret it because it means their actions are not keeping up with economic developments.
This kind of expectation management is actually not new. When the Federal Reserve raised interest rates, it also adopted a strategy of rapid and substantial rate hikes to respond to market expectations in advance.
Therefore, Nick's tweet explains that even if the Fed chooses to cut interest rates by 50 basis points, it is out of defensive considerations.
So how did the market react?
Judging from the market reaction, the situation is somewhat complicated. The rise in the US dollar index and US Treasury yields shows that the market does not fully accept the 50 basis point rate cut strategy.
The high opening and low closing of U.S. stocks also shows that the market is still digesting this information.
If investors accept Nick's view before the 19th and believe that a 50 basis point rate cut is defensive, the implementation of this policy may not cause much volatility.
After all, the market has fully anticipated this, with CME data showing the probability of a 50 basis point rate cut rising to 63% from 59% yesterday, while Polymarket data also rose to 53% from 51%.
For the crypto market, it all depends on the reaction of the U.S. stock market. If U.S. stock investors can digest this information, then the crypto market will not fluctuate too much.
However, if the U.S. stock market fails to digest this information and falls, the crypto market will also be difficult to remain unaffected.
Therefore, the Federal Reserve is likely to choose to cut interest rates by 50 basis points to avoid the risk of economic recession. In the short term, the volatility of the US stock market and the crypto market will be very large. At this time, it is recommended to watch more and do less, mainly hold spot, and don't touch contract trading.
2. How does He Yi view the future of the cryptocurrency world?
Recently, Binance has sparked heated discussions in the community after launching multiple Meme coins, especially rumors about "insider trading".
A KOL accurately predicted the specific currency before listing, which made people question Binance’s token listing process.
At the same time, the US SEC also filed an amended complaint against Binance, accusing it of acting as an unregistered securities provider.
In response to this, Binance co-founder He Yi published a long article responding to the anxiety in the cryptocurrency circle and the rumors about coin listings.
He Yi said that recently, many people have been discussing whether blockchain and cryptocurrency are going to be doomed.
Some people say that blockchain is a scam and it is over, and people in the industry are also asking whether this industry still has a future.
In fact, this worry does not only exist in the cryptocurrency circle. Our lives are inseparable from the economic cycle, and the good or bad economy will affect where everyone spends their money.
For veteran players in the cryptocurrency world, news from the Federal Reserve is like a barometer of the market.
The cryptocurrency world has undergone a lot of changes over the past decade. Early investors were like gold diggers in the wild west, and when the economy was good, the cryptocurrency world grew very fast.
But as time goes by, the economy enters another cycle, and making money is no longer so easy. Bitcoin has gone from being called a scam to the current ETF approval, which is a big victory.
Traditional financial institutions have also begun to participate in the cryptocurrency market, which shows that the cryptocurrency circle is maturing.
So is Binance flat?
He Yi responded that Binance is a company that grew up in the blockchain industry. We hope that blockchain will not only be a paradise for niche players, but can serve more people.
To achieve this goal, we need to follow the rules of traditional finance, such as compliance and anti-money laundering. Just like in the early days of the Internet, only companies that serve the majority of people can become giants.
Binance is not just a trading platform, we have also launched products such as Earn, Square, Pay, Web3 Wallet, etc. We hope to make blockchain technology more popular so that ordinary people can also benefit from blockchain, not just speculation in coins.
Is your coin listed on Binance?
He Yi responded that recently, the community has been discussing the listing of coins on Binance very intensely. We have listened carefully to everyone's opinions.
Binance has a complete process for listing coins, including business, research, committees, and compliance reviews. We hope to list projects that users need, projects that will last long, and projects that have business logic.
We are also constantly reflecting on and improving the coin listing process to ensure compliance and prevent insider trading. We welcome everyone to report any misconduct and provide high rewards.
In summary, the cryptocurrency industry will not end. Although there is a bubble in the cryptocurrency industry now, products that truly solve user needs will change the world. Binance emphasizes compliance and user needs in the process of listing coins to promote the long-term development of the industry.
Finally, let’s summarize. Today, the focus of the market is on the Federal Reserve’s interest rate meeting.
The Federal Reserve is likely to choose to cut interest rates by 50 basis points to avoid the risk of a recession. In the short term, both the U.S. stock market and the crypto market will be very volatile.
You can pay special attention to the Federal Reserve’s interest rate decision at 2:00 a.m. today and Powell’s speech at 2:30 a.m.
