The essence of interest rate cuts: a starting point, not an endpoint
The Federal Reserve has cut interest rates by 25 basis points as expected. The market's first reaction was 'the shoe has dropped,' but this is not the end of the story. History has repeatedly shown that an interest rate cut that is fully priced in often does not directly initiate a bull market.
What truly drives the market is the 'turning signal' represented by the interest rate cut and whether it can open the real 'liquidity floodgates.' The Federal Reserve has clearly shifted its policy focus from controlling inflation to concerns about the job market, indicating a key consensus: subsequent economic support will take precedence over strict control of inflation. This means we may be at the starting point of a prolonged easing cycle.
For the crypto market, this not only reduces the opportunity cost of holding non-yielding assets like Bitcoin but, more importantly, it signals an improvement in the liquidity of the dollar within the system. When money becomes 'cheaper' and more abundant, funds seeking returns will inevitably be more proactive in seeking outlets. The crypto market, as the forefront of the world's most resilient risk assets, will inevitably attract these eyes.
However, in the upcoming liquidity feast, we need to remain clear-headed. Funds will push everything up, but when the tide goes out, only real value creation can settle.
This makes us rethink the essence of investment. Rather than chasing every bubble inflated by liquidity in an instant, it is better to focus on projects that are using crypto technology and community power to address real-world problems in a down-to-earth manner. For example, communities like #MAX are turning consensus into action, committed to promoting public education globally, with their value not lying in gaming macro policies but in verifiable, positive social impact every day.
While everyone is calculating how many points the interest rate cut can bring, perhaps we should look for those certainties that can traverse cycles and are inherently 'self-generating.'
