Putting aside the news about ETFs, let’s talk about the impact of historical interest rate hikes and cuts in the United States on Bitcoin.

In (Chart 1) we can see that in December 2018, the United States raised interest rates to a maximum of 2.4 and maintained it until June-July 2019. It was still in a "high interest rate" state and has not yet started to cut interest rates.

Check it out (Chart 3) Bitcoin was just over 3,000 US dollars in December 2018 (the lowest at that time)

In June 2019, it was just at 13xxx US dollars (the highest at the time)

It will last for 6-7 months until the United States starts to cut interest rates in July 2019.

Bitcoin fell all the way from 13xxx to what we later knew as the 3/12 incident (more than 3,000 US dollars)

Now the United States has also stopped cutting interest rates and has been in a high interest rate environment for about 6 months (Chart 4). Since it stopped raising interest rates in July 2023, Bitcoin has also been on the rise during this period.

But now the market is beginning to hear news that interest rates are about to be cut. We must be careful of the lessons of the past, although history may not repeat itself.

But we need to understand that the market will be bullish because of "releasing water"

Rather than "cutting interest rates"

Cutting interest rates is only a means to stimulate the economy. If even cutting interest rates cannot change the relief situation, the central bank will start printing money (QE quantitative easing). The way to really push up prices is to pour a large amount of money into the market.

The reason why interest rates need to be cut is very simple. It is because it is observed that the unemployment rate increases and consumption power decreases. At this time, people will restrain their consumption, so that the inflation problem can be truly solved. However, the market is sluggish, so we have to stimulate it through interest rate cuts first. market economy

My point is that the first turning point for the market is when interest rates start to be cut, and maybe now is the last hurray in the short term.

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