The Impact of Interest Rate Cuts on the Market: A Wave of Rate Cuts May Not Be Beneficial

This round of interest rate cuts does not necessarily signal good news. The scale of inflation generated by multiplication, combined with the early morning's confident interest rate hike statement from 'Little Days', surprised the market. As a result, the price of Bitcoin dropped significantly, with a single fluctuation falling by 5000 points; Ethereum dropped 300 points overnight, while altcoins generally corrected by more than 10%. What was expected to be the benefits of rate cuts ultimately turned out to be 'a false promise'.

First Rate Cut (September 18): The target federal funds rate was lowered by 50 basis points to 4.75%—5.00%. This rate cut met market expectations, leading to Bitcoin's price rebounding from $60,000, which exceeded the expectations of most consumers, resulting in a bullish market.

Second Rate Cut (November 7): The federal funds rate range was reduced by 25 basis points to 4.50%—4.75%. This rate cut also met market expectations, and the level of market inflation was still acceptable, causing Bitcoin's price to rise to $69,000, which then began to lead the market.

Third Rate Cut (December 14): The target federal funds rate was reduced by 25 basis points to 4.25%—4.50%. This rate cut fully met market expectations, and with Bitcoin continuously reaching new highs, the bullish sentiment in the market had already digested the expectations of the rate cut in advance, leading to a relatively lukewarm market reaction after this cut.