The Federal Reserve is about to change leadership, and a major upheaval may be more intense than simply lowering interest rates!
Dark horse Kevin Walsh suddenly emerged, surpassing the previous favorite Hassett in the prediction market, becoming the top candidate for the next chairman of the Federal Reserve. The impact of this on the cryptocurrency market could be much more complex than just waiting for interest rate cuts.
My view is clear: this personnel change is a "dove in eagle's clothing."
On the surface, it seems favorable: Walsh met with Trump last week and is said to agree that "rates must be lowered." The market will feel that bringing in a compliant chairman who is willing to lower rates more quickly means that liquidity will be unleashed, benefiting all risk assets, including cryptocurrencies.
But be cautious about the core: this person's background is not simple. He is a former Federal Reserve governor who experienced the 2008 financial crisis and is a "homegrown" Wall Street figure, with JPMorgan CEO Dimon publicly supporting him. His father-in-law is also a longtime friend and financier of Trump. This kind of "political and business duality" background means he will never be Trump's puppet, and his policy independence may be stronger than the market currently expects. Don't forget, there are already bond market titans worried that overly catering to the president for aggressive rate cuts could ruin the market.
What does this mean for the crypto market? Retail investors must understand the threefold impact:
In the short term, expectations will lead to increased volatility. As long as the narrative of "changing leadership and lowering rates" is hot, market sentiment will tend to be warm.
In the long term, there may be surprises regarding regulation. Walsh himself has a pragmatic understanding of cryptocurrencies, having invested in crypto projects and believing that Bitcoin could become the "new gold" for young people. This could be a hidden Easter egg for the long-term narrative of Bitcoin and a potentially friendly regulatory environment.
What should investors do? Don't rush to buy the dip; with the current trend, those still talking about a return of the bull market are dreaming. Those in spot trading can dollar-cost average, and those in futures should go with the trend, avoiding counter-trend moves, and preserve capital to survive until the next bull market!
What players need to do is to "patiently wait for opportunities, act decisively and accurately." Follow the leaders, and come into the village to get daily shared real-time strategies + cutting loss guidelines!
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