Let's review the historical impact of the Fed's interest rate cuts on the Crypto Assets market and based on this, forecast the possible trends for this cycle.

1. Historical Trend Review

1. 2019 Interest Rate Cuts: Expectations Lead, Landing Diverges In 2019, the Fed carried out three interest rate cuts, each by 25 basis points. Under this easing policy, Bitcoin reacted early to liquidity expectations, rising from $3,800 to $13,000 before June. However, after the actual interest rate cuts were implemented, the market entered a profit-taking phase, and Bitcoin fell back below $7,000 by the end of the year. This indicates that policy expectations are often priced in ahead of time, and caution is needed for volatility and corrections when officially announced.
2. 2020 Interest Rate Cuts: Panic Hits the Bottom, Liquidity Fuels Bull Market In 2020, in response to the pandemic, the Fed urgently cut interest rates by 150 basis points and launched quantitative easing, pulling rates back to zero. The market's initial reaction was a panic sell-off caused by liquidity tightening—Bitcoin plummeted to $3,800 during the "312" event. However, as liquidity surged into the market, it quickly rebounded in a V-shape, ultimately igniting an epic bull market. Bitcoin reached a new high of $69,000 in November 2021, while Ethereum surged from a low of $90 to nearly $4,800.

2. Market Expectations for This Round of Interest Rate Cuts

Currently, the market generally expects the Fed to cut interest rates by 25 basis points, which has become a consensus. Historically, interest rate cuts themselves do not necessarily directly drive up coin prices, but rather exert their influence indirectly by changing the flow of funds and market sentiment. The following points are worth noting:

· Be cautious of "Buy the Rumor, Sell the News". Although interest rate cuts are generally favorable for risk assets, it is important to note that there may be short-term selling pressure after the policy is implemented. Referencing 2019, Bitcoin retraced more than 15% within a week after the interest rate cut announcement. The current market has partially priced in expectations, and we need to guard against technical pullbacks after the good news is realized.
· Mainstream coins are more favored by funds. Bitcoin and Ethereum, as the cornerstones of the crypto market, are likely to become the preferred allocation objects for institutional funds. The continued advancement of Bitcoin spot ETFs, as well as the staking yields of Ethereum and progress in the Layer2 ecosystem, add extra attractiveness to them. If traditional financial markets come under pressure again due to debt or inflation, crypto assets are expected to become a new generation of "asset safe havens."
· Beware of "good news being fully priced in is bad news". After the policy becomes clear, the market's attention may shift back to the fundamentals. Whether the upward trend can continue still needs to be observed based on whether the macro environment truly warms up and whether new funds enter the market in large amounts. Past cycles remind us that overly relying on a single event for speculation is often less stable than sustained capital inflow and ecological construction support.

In summary, the Fed's interest rate cut is a medium to long-term positive for Crypto Assets, but short-term fluctuations are unavoidable. It is recommended to view policy events rationally, seize structural opportunities, and always maintain risk awareness. #美联储降息25个基点 #BTC战略储备市场影响