Last night, the Federal Reserve cut interest rates, and the US stock market surged, but Bitcoin didn't jump. What's even stranger is that the Bank of Japan is going to do the opposite of us next week, and it's highly likely they will raise interest rates.
This is not a battle of left and right, but a "mixed doubles" for our crypto circle!
Why didn't the favorable conditions come with the Fed's rate cut?
Last night, the Federal Reserve cut rates by 25 basis points, which is indeed easing, and the Dow Jones jumped nearly 500 points. But the problem is that the market had already anticipated this, and the benefits were consumed in advance, so Wall Street took the opportunity to sell off, and naturally Bitcoin didn't soar. More crucially, Powell's statement leaned towards a "hawkish" stance, hinting that rate cuts might be paused, which effectively tightened the future liquidity.
The real killer move: the Bank of Japan wants to "siphon off"
The bigger thunder is in Japan. Over 90% of economists predict that the Bank of Japan will raise interest rates next week, marking the end of the last source of cheap capital globally! For over a decade, countless institutions borrowed yen at zero interest rates and converted them into dollars to buy assets worldwide, with Bitcoin being one of the largest reservoirs. Now that Japan raises interest rates, costs will skyrocket, and these people must sell off assets and convert back to yen to repay debts, leading to a global "siphoning" and a market crash is inevitable.
My personal opinion:
Don't be fooled by the smoke screen of the Fed's rate cut. The real storm eye is in Japan. Global liquidity is undergoing a fundamental reversal: on one side, expectations for US easing are weakening, while on the other, Japan is starting to siphon off. The cryptocurrency market, which is most sensitive to capital, will be squeezed from both ends.
Follow me, next week during the Bank of Japan's decision night, I will provide real-time interpretations in the village, helping everyone dodge the blade and prepare our sacks.
For those who want to keep up with the thinking, there is a spot in the chat room!
