Two major events occurred overnight. The Federal Reserve announced a 25 basis point interest rate cut. Additionally, it hinted that the number of rate cuts over the next 25 years may be lower than expected. As a result, both the U.S. stock market and cryptocurrencies plummeted. $BTC fell below $100,000, with Meme coins plummeting by 20% in numerous cases, and the Dow Jones Industrial Average dropped by 2.59%, setting a record for the longest single-day consecutive decline in 50 years.
Just from the hawkish stance exhibited by the Americans last night, it truly caused panic in the market. Hawkish signals indicate that monetary easing will be limited, which will lead to market funds flowing back from the crypto market to traditional assets, significantly impacting both trading depth and liquidity. At an extreme point, a large cash-out sell order from a major player could very likely trigger a sharp drop in coin prices.
Many believe that in the past few market cycles, the Federal Reserve FOMC meeting led the rebound trend, and perhaps this time is also a good opportunity. However, the feedback from the market after last night's meeting was akin to Powell slapping Trump in the face.
But there is no need to panic too much, after all, the 'Bitcoin President' has not yet officially taken office in the White House. Last night, WLFI (Trump family's crypto project) spent $250,000 USDC to buy over 230,000 ENA, and exchanged $10.36 million worth of cbBTC for WBTC. Since December, the Trump side has spent nearly $45 million acquiring various assets in the crypto space.
Personally, I feel that investing in cryptocurrencies does not need to overly scrutinize the correlation between interest rate cuts and the volatility of the crypto market. The correlation between the two has decreased, and while it will create some price pressure, the key factors within the crypto world itself are the main reasons influencing market trends, such as opportunities in RWA and technological breakthroughs in AI-related fields.
