White House advisor Kevin Hassett's recent statement that the Federal Reserve should 'cautiously begin to cut interest rates' quickly triggered a chain reaction in the crypto market. As a popular candidate for the Federal Reserve Chair, his remarks not only convey a moderate shift in monetary policy but also stir the nerves of this highly sensitive asset market through two paths: liquidity expectations and adjustments in risk appetite.
From the perspective of core influencing mechanisms, Hassett's 'cautious' tone balances market expectations for liquidity easing with concerns about economic risks. Historical experience shows that cuts in the Federal Reserve's interest rates often enhance the relative appeal of crypto assets by lowering risk-free rates and weakening the purchasing power of the dollar—during the aggressive rate cuts in 2020 amid the pandemic, the crypto bull market was directly sparked, with Bitcoin's price soaring from $5,000 to $69,000. However, this statement of 'cautious rate cuts' has shattered the market's fantasy of aggressive easing, preventing a blind rush of funds into risk assets and alleviating the panic over the continuation of tightening policies, resulting in a crypto market characterized by 'rational fluctuations under moderate favorable conditions.' As of December 5, Bitcoin's price remains around $90,000, with a slight decline of 17.79% in 24-hour trading volume, reflecting the game between investor expectations and wait-and-see attitudes.
The deeper impact lies in the reshaping of market expectations and the allocation logic of long-term funds. Hassett, as a core economic advisor to the White House, expresses not only personal opinions but also implies the White House's policy appeal for a 'soft landing'. For the cryptocurrency market, this 'measured easing' means that liquidity will be gradually released rather than suddenly surging, which helps reduce the volatility risks brought by leveraged speculation, while providing a more stable environment for institutional funds to enter. Crucially, if Hassett later assumes the role of Federal Reserve Chair, his advocacy for rate cuts along with a cautious stance could drive the cryptocurrency market from 'policy impulse-driven volatility' to a 'fundamentally driven stable recovery'. Coupled with the regulatory framework established by the (GENIUS Act), the inflow of compliant institutional funds could become a long-term trend.
In the short term, divergences in the cryptocurrency market will continue: some investors focus on the liquidity improvement brought by rate cuts, betting on the valuation recovery of core assets like Bitcoin and Ethereum; while others are concerned about economic downward pressure and policy uncertainty, choosing to adopt a wait-and-see approach for risk aversion. However, in the long run, Hassett's statements have pointed the way for the cryptocurrency market—against the backdrop of a gradual shift towards easing in global monetary policy, the word 'caution' will become the 'stabilizer' of market sentiment, pushing cryptocurrency assets from pure speculative targets to gradually integrating into a broader macroeconomic policy framework.
