"The Federal Reserve is going to cut interest rates, and Bitcoin's bull market is solid!" I've been hearing this phrase so often lately that my ears are almost calloused. Every time I meet a friend who says this, I can't help but offer a cigarette: Brother, let’s not rush to shout 'bullish', can we first review something?
Who still remembers that wave of "interest rate hikes" in 2023? At that time, the Federal Reserve kept raising interest rates, and there was a wailing in the industry. Many influencers confidently said, "Bitcoin will drop below $10,000." What happened? This asset rode the rhythm of rate hikes, skyrocketing from $16,000 to $110,000, leaving the bears with swollen faces, while a bunch of people on the mountain top slapped their thighs: "Wasn't it said that rate hikes are bearish? How come it keeps rising?"
Now it gets even more interesting; as it looks like there will be a rate cut, this group of people collectively turns bullish, saying 'stop tapering + rate cuts = free money market'. I'm puzzled: if both hikes and cuts lead to rises, then are these two terms positive or negative? It seems they are Schrödinger's policies, and whether they rise or fall depends on how you interpret it.
As an old player who has been in the crypto circle for eight years, let me put it this way: the macro is just a backdrop and never the steering wheel. Many people love to apply the logic of traditional finance to the crypto market but forget that the core here is 'money talks', not the announcements of the Federal Reserve.
What the market is really focused on is never the three words 'hike or not', but rather three more concrete questions: First, when will liquidity actually turn? Will the money released by the central bank really flow into this circle? Second, when will the expectations of capital change? Is it a preemptive rush or waiting for policy implementation? Third, when will institutional big shots take action? They are the main force that can stir up the waves; the emotions of retail investors are at most just ripples.
Those who say 'interest rate hikes = negative' and 'interest rate cuts = positive' are like using elementary arithmetic to solve calculus problems; it's not wrong, it's just fundamentally off the mark. The crypto market is a highly capitalized place, where money runs faster than logic. For example, on the day a certain country's regulation announced negative news in 2024, Bitcoin actually rose by 15%. Why? Because institutions had already been waiting at the low levels, using the negative news to acquire chips; the so-called 'negative news' was just their buying signal.
In simple terms, whether the market rises or not has never been decided by a specific press release. Capital needs a reason, and Bitcoin just happens to be the most convenient outlet. During the 2023 interest rate hike cycle, the traditional market was sluggish, and a lot of capital had nowhere to go, so it rushed into the crypto circle; if in a rate cut cycle the stock and bond markets are booming, capital will turn and leave, why can't Bitcoin also go bearish?
I've seen too many people rely on 'one-sentence conclusions' for trading cryptocurrencies; when it rises, they brag about their predictions, and when it falls, they curse the market for not following the rules. But isn't the charm of this market that 'common sense doesn't apply'?
Lastly, let me ask a practical question: what signal do you think the next wave of capital will focus on? Is it the institutional ETF holdings data or the real changes in liquidity? Let's discuss your views in the comments, follow me, and next time we'll dig into those little tricks institutions use to build positions secretly. After all, in this circle, relying on news is not as good as relying on logic, and following the trend is not as good as relying on oneself. Follow Yang Yang.
