Today someone asked me why the cryptocurrency dropped after the Federal Reserve cut interest rates?

Why is that? It's actually quite simple, it's all about expectations. The Federal Reserve cutting interest rates was anticipated by the vast majority, which is called meeting expectations. Meeting expectations often doesn't lead to significant fluctuations. The market needs something beyond expectations; for example, if the Federal Reserve said they would hold Bitcoin, you would see it rise to 150,000 the very next day. On the contrary, if the Federal Reserve suddenly states, "We will not hold Bitcoin," this is called falling short of expectations, which is why the market drops.

However, what I want to say is that such questions and their answers don't really matter much for ordinary cryptocurrency traders like us.

Generally, cryptocurrency trading is divided into short-term and long-term. Let's talk about long-term first. For long-term players, what impact do such news have? As a long-term player, I can tell you that it has no impact at all. The degree of influence is just too negligible. After all, it hasn’t brought about a large flow of funds, nor has it significantly changed future policies. So why care about it?

As for short-term trading, it’s actually not useful either because in such situations, you can't react in time, and by the time you do, the drop has already happened. Furthermore, there's a high probability that you would sell at or short at the lowest point, which is worse than being completely unaware. This is the real black swan, an event that is completely unpredictable.

So, don’t ask me such questions anymore; they’re of no use.