Biden's latest speech today has once again filled the market with expectations. He mentioned that interest rates will fall further, and this information has undoubtedly injected new vitality into the capital market, especially the crypto market. Let's analyze the opportunities and risks behind this in depth.

1. The profound impact of falling interest rates on the economy

First, lower interest rates mean lower borrowing costs, which will stimulate both corporate investment and personal consumption. Looking back at history, the Fed’s interest rate cuts during the 2008 financial crisis and the 2020 epidemic both drove a rapid rebound in the market. The expectation of this rate cut will undoubtedly be a huge boon to emerging markets, especially the cryptocurrency market.

In the past, after the 2008 financial crisis, technology stocks ushered in rapid development. After the 2020 epidemic, the prices of crypto assets such as Bitcoin and Ethereum also ushered in explosive growth. In a low-interest environment, investors will be more inclined to look for high-return projects, and cryptocurrencies, as high-risk and high-return investment options, will inevitably attract more capital inflows.

2. Crypto market: Has the next wave of opportunities arrived?

Biden's speech undoubtedly makes us look forward to the future. With the expectation of lower interest rates, funds will flow to investment projects with higher returns, and the crypto market will become the focus of investors. For example, the price of Bitcoin has shown a strong upward momentum recently. Data shows that Bitcoin has risen by 1.65% in the past 24 hours, and the price has exceeded $63,000, which is likely to be a positive response of the market to the expectation of lower interest rates.

Not only Bitcoin, but Ethereum and other mainstream cryptocurrencies will also benefit from this macroeconomic trend. Low interest rates mean that the opportunity cost of holding cash increases, and investing in high-return assets such as cryptocurrencies has become a choice for more people.

3. The long-term impact of the Fed’s interest rate cut: a double-edged sword?

However, although the benefits of interest rate cuts are very obvious, we must also see the potential risks. The volatility of the crypto market has always been large, and prices may fluctuate violently at any time due to sudden news. For example, on "Black Thursday" in March 2020, the crypto market plunged sharply overnight. Although it rebounded quickly afterwards, it also reminded us of the unpredictability of the market.

For example, if the real interest rate of the US dollar continues to decline, although more funds may flow into the cryptocurrency market, it also means that inflationary pressure will increase and the market may face more challenges due to macroeconomic uncertainties.

4. Short-term and long-term investment strategies

In the short term, Biden's speech may trigger a quick reaction in the market, especially for crypto assets like Bitcoin and Ethereum. We may see more capital inflows and prices continue to rise. But investors also need to be wary of the high volatility of the short-term market and not blindly chase high prices.

In the long run, if the Fed continues to cut interest rates and approves spot ETFs such as ETH and BTC, the crypto market will be expected to usher in a new round of bull market. History has proven that market capital inflows are closely related to the policy environment. Rate cuts and the launch of ETFs will significantly increase market liquidity and drive up cryptocurrency prices.

Conclusion: Seize the opportunity and stay alert

Biden's speech and the Federal Reserve's interest rate cut expectations have injected new impetus into the crypto market, especially for mainstream crypto assets such as Bitcoin and Ethereum. But we must realize that the market is changing rapidly, and high returns are often accompanied by high risks. Only through rational analysis and good risk management can you truly benefit from this wave of market conditions.

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The above content is for information sharing only and does not constitute any investment advice! Investment is risky, so be cautious when entering the market!

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