Historically, interest rate cuts have often been associated with financial crises, but can we avoid repeating the same mistakes this time?

Currently, the market generally expects that the Fed may cut interest rates by another 50 basis points at the next meeting, and the probability of this expectation has reached 45.7% and is still rising. This shows that many people may underestimate the Fed's determination to take interest rate cuts. If the interest rate is cut by 50 basis points in a row, coupled with possible further interest rate cuts in the future, liquidity in the market will increase further. In addition, due to the impact of interest rate cuts, the value of the US dollar and USDT has declined, from 7.3 a few months ago to more than 6.0 now, which means that the purchasing power of holding US dollar assets is shrinking.

In this context, interest rate cuts are actually pushing investors to convert their US dollars or USDT into other assets, especially US stocks and cryptocurrencies that are more sensitive to interest rate changes.

It is expected that trillions of dollars of funds will flow from the traditional banking system to the cryptocurrency market in the future. The reason is simple: in the case of a depreciating US dollar, not investing means shrinking assets. Smart money on Wall Street will definitely participate, and as interest rates fall and financing costs decrease, investors may increase their purchasing power by borrowing and using leverage. This is exactly why the Fed's rate cut may give rise to a bull market.

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