Breaking! Trump favors Fed chair who wants to 'turn off the tap'? A must-read guide for crypto players to avoid pitfalls
Major reversal! The competition for the Fed chair position has new twists, and the popular candidate backed by Trump plans to shrink quantitative easing (QE) policy—this is the 'lifeblood of funds' for the crypto world, and if the policy shifts, the cryptocurrency market may face severe turbulence!
QE essentially involves the central bank printing money to purchase government bonds, and after a massive influx of funds into the market, a lot of hot money will flow into cryptocurrencies like Bitcoin and Ethereum, which has been one of the core drivers of the crypto boom in recent years. During the massive liquidity injection by the Fed in 2020, Bitcoin surged from a few thousand dollars to a peak of $69,000. If we really 'suck the money back' now, market liquidity will tighten, and short-term volatility in the crypto world is inevitable.
In the face of changes, these three survival rules must be remembered:
1. Refuse to go all in, deploy funds in batches: Entering the market with a full position when the situation is unclear is like gambling; splitting funds and buying on dips can help average down costs;
2. Keep a close eye on policy dynamics: Any statements from the Fed before Powell's term ends in May next year could impact the market, so pay more attention to authoritative news and avoid blindly following trends;
3. Focus on valuable coins, steer clear of meme coins: Mainstream cryptocurrencies like Bitcoin and Ethereum have stronger risk resistance, while 'meme coins' lacking fundamental support may face zero-risk.
In fact, opportunities are hidden in crises! Currently, inflation is high in the U.S., and if the economy is under pressure, the central bank may be forced to restart easing. In the long run, the core logic of the crypto world remains unchanged, and a pullback may actually be a window for bottom-fishing quality assets.
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