Bitcoin peaked at $62,500 and is currently fluctuating around $61,600. Ethereum has also returned to $2,400.
Altcoins have ushered in a wave of general price increases, with the average increase being around 10%.
The news worth noting is:
1. The Federal Reserve cut interest rates by 50 basis points, officially starting the easing cycle
The Federal Reserve announced that it would cut interest rates from 5.25%-5.50% to 4.75%-5.0%, a 50 basis point cut.
This is the first rate cut since March 2022 and marks the beginning of the Fed's shift from tightening to easing policy.
This rate cut is actually a supplement to the lack of a rate cut in July. It does not mean that there are major problems with the US economy, but rather shows the Fed's confidence in controlling inflation and supporting the economy. They believe that the economy can achieve a "soft landing."
After the announcement of the rate cut, the market reacted steadily, indicating that the Federal Reserve did a good job in managing market expectations.
Everyone originally thought that the interest rate would only be cut by 25 basis points, but the Fed's "megaphone" Nick successfully guided the market to expect a 50 basis point cut.
This guidance makes market sentiment more stable, just like the market expectation management in June 2022.
By "leaking information" in advance, the Federal Reserve allows the market to fully discuss and digest various negative news, ensuring a smooth transition in the market when the actual decision is announced.
In his subsequent speech, Powell did not explicitly say that the 50 basis point rate cut was due to economic problems, but instead emphasized the balance between inflation and unemployment.
He believes that the faster-than-expected decline in inflation is the main reason for further interest rate cuts.
Although Powell did not clearly state the pace of future interest rate cuts, judging from the dot plot, there is a high possibility that the interest rate will be cut by 25 basis points each in November and December.
According to CME's "Fed Watch", the probability of a 25 basis point rate cut in November is 62.2%, and the probability of a 50 basis point rate cut is 37.8%.
2. Trump buys burgers with Bitcoin at a New York bar
Trump bought a cheeseburger at PubKey Bar in New York City with bitcoin, his first transaction using the digital currency, and called the purchase a "historic moment."
The official account of PubKey Bar also sent a message saying that the transaction occurred at block height 861871.
Trump then handed out burgers to patrons at the bar, jokingly calling them "crypto burgers."
This incident shows that cryptocurrencies such as Bitcoin are becoming more and more accepted by people. When influential people like Trump use Bitcoin, it may make more people know and recognize cryptocurrencies, and attract more people to pay attention to and use them.
3. How to use common sense in investing to avoid mistakes?
Today I want to share with you some useful information.
Common sense is a very important tool in investing. It not only helps us reduce mistakes, but also allows us to correct mistakes faster.
However, common sense is not everything. We need to be vigilant and avoid being complacent.
How to avoid being self-righteous?
To avoid being self-righteous, we need to use common sense to reflect on our own behavior and decisions.
For example, if you always lose money in your investments, it may be because there are no opportunities in the market, or it may be because you do not have enough understanding and information about the market.
When you know a lot about a project but still lose money, it may be because you have blind spots in your thinking or information. In other words, you may have overlooked some important information or perspectives.
If you and others have very different views on an industry, trend, or project, common sense tells us that this may be because the two parties have different perceptions.
The less cognitive party may not be able to understand more complex issues and may mistakenly believe that they are right.
By reflecting on our own investment losses and the differences in our perceptions with others, we can identify our blind spots.
Keeping an open mind and constantly reflecting can help you understand other people's perspectives and avoid falling into the trap of self-righteousness.
The importance of independent thinking
Independent thinking is like a double-edged sword, it can bring benefits but can also lead to mistakes.
Meaning, independent thinking can help us find innovative solutions, but it can also go wrong without sufficient information or due to poor judgment.
To find good answers, we need to have access to high-quality information and to process that information effectively.
The reason many people have trouble doing this is because they don’t realize that there may be something wrong with their thinking when they make the decision.
No one is omniscient and our thinking is always flawed. Even very smart people make mistakes. The ability to acquire and process information only helps us reduce the probability of error.
Good sources of information include other people's different perspectives. A good way of thinking should welcome different opinions. Although the final decision is made by ourselves, listening to different opinions can improve the success rate of our decision-making.
Improve information input
To reduce errors, we need better information, just as we need to have enough information to support our judgment when we make decisions.
If we have little information, it is easy to fail to see the full picture of the problem, leading to wrong decisions. Thinking style is also very important, and a good thinking style can help us make better decisions.
For example, Lei Jun wanted to build a car, so he had to become the person who knew the most about cars. He increased his knowledge by taking notes and test-driving many cars. His success was not because he was the president of Xiaomi, but because he was working hard to learn.
What’s worse than not understanding is thinking you know. Many times, we think we know something, but in fact we don’t know it all, which can easily lead to wrong decisions.
The biggest difference between people lies in their ability to process information and their way of thinking. The less information you get, the harder it is to find your own mistakes.
There is no shortage of opportunities in the crypto industry, because the field is still in its early stages, most people lack experience, and the market is inefficient, so there are more opportunities.
By striving to obtain more information and keeping an open mind, we can reduce blind spots and increase the success rate of decision-making.
What are some simple and useful common sense?
First of all, mistakes should be corrected as soon as possible, because the sooner they are corrected, the lower the cost.
For example, if you find that you have made a mistake in your investment and you may lose money, or your strategy is wrong, it is best to correct these mistakes immediately. The sooner you correct them, the smaller the loss.
Another common sense is "Don't invest if you don't understand, and don't do if you don't understand."
If you don’t understand an investment project, don’t invest in it lightly. Many people like to follow the crowd and invest when they see others making money, but they often end up losing money.
Finally, it is not difficult to find mistakes, but it is difficult to make as few mistakes as possible.
Even successful investors like Buffett make mistakes. The success of an investment is ultimately determined by the results. As long as your investments are profitable overall, you are doing well.
