In 3 minutes, I'll explain why the Federal Reserve's interest rate cut led to a drop in Bitcoin, turning it into a trap.

Many people were confused when they looked at the market this morning. Everyone was saying that the Federal Reserve cut interest rates, but Bitcoin not only didn't rise, it suddenly plummeted. Could it be fake news?

Don't panic; once you break down those complicated financial terms, you'll understand that what seems like a good thing is actually a trap.

1. The so-called good news has long ceased to be fresh news.

The Federal Reserve cut by 25 basis points this time, bringing the interest rate to 3.50%-3.75%.

In simple terms, it's like when you scored 60 on an exam, and your dad promised last month to buy you a game console; when he actually brings it home today, you're not surprised because you already knew.

In the crypto world, everyone had already guessed that the cut would be this significant, and savvy investors had already bought in two weeks ago and were waiting. Once the news broke today and the good news was realized, those people sold off to take their profits, causing the price to drop.

2. The expectation for a good market in the future has evaporated, which is the key reason for the big drop.

The content released this time stated that the Fed is expected to only cut rates once in 2026.

This is the most critical point! Previously, everyone thought that the Federal Reserve would continue to cut rates next year and inject more money into the market, leading to a bull market in crypto.

However, Fed Chairman Powell directly stated that there wouldn’t be many cuts next year, possibly just one.

Since there won't be much money injected next year, and the money will still be tight, the anticipated bull market has lost its momentum, prompting those who bought heavily to sell and escape quickly.

3. Disagreement within the Federal Reserve has increased, and more people are opposing rate cuts.

This time, three people voted against the rate cut, and some even felt it shouldn't have been cut.

Previously, there was unanimous agreement on rate cuts, but now there are three key figures opposing it, indicating internal concern about rising inflation (especially with Trump possibly returning to power, which could impact policy).

For Bitcoin, as long as someone suggests not injecting too much money, there is risk. People are worried that after this rate cut, there may not be any further cuts in the near term.

To summarize why it dropped:

Simply put, everyone was hoping for a sustained period of monetary easing, but it turns out there will only be one cut next year, and there are internal disagreements within the Fed.

The market isn't afraid of bad news; it fears that the actual situation is worse than expected. This time, the rate cut seemed beneficial on the surface, but all future expectations have vanished, which is why Bitcoin dropped.