Recently, many have asked me: "Blogger, is it really necessary to pay attention to short-term news like the Federal Reserve's leadership change? I am a long-term holder of crypto assets, shouldn't I ignore these?" In fact, this is a very good question! As a crypto analyst who engages in both short-term trading and long-term positioning, I want to tell everyone: short-term news determines volatility, while long-term policies determine direction. The Federal Reserve's leadership change not only affects short-term market trends during the Christmas week but will also determine the long-term trajectory of the crypto market over the next 2-4 years. Understanding this is key to really making money in the crypto market!
First, let me give you an in-depth analysis, packed with valuable insights! The term of the Federal Reserve chairman is generally 4 years, and the policy orientation during these 4 years will form a 'long-term trend'. For example, during Powell's term, the first two years were characterized by loose policies, leading the crypto market to experience a bull market in 2020-2021; the last two years saw tightening policies, and the crypto market entered a bear market in 2022. Therefore, choosing who becomes the new chairman essentially means choosing the 'policy cycle' for the next 4 years. If a dovish chairman is elected, it is highly likely that the policy environment will remain relatively loose for the next 4 years, providing ample long-term liquidity for the crypto market, suitable for establishing long-term value assets; if a hawkish chairman is elected, there may be continued tightening of monetary policy over the next 4 years, leading to greater long-term pressure on the crypto market, necessitating more cautious selection of targets.
Let me also discuss what I see as 'long-term opportunities': Whether a dovish or hawkish candidate is elected, the long-term trend of the crypto market will not change, because the core value of crypto assets lies in 'decentralization' and 'technological innovation', which cannot be obstructed by Federal Reserve policies. However, the focus of opportunities varies with different policy environments. If a dovish candidate is elected, the loose liquidity will give more opportunities to 'narrative-driven' assets, such as quality projects in the Web3, metaverse, and DeFi sectors, as hot money will be more willing to chase high growth and high return targets; if a hawkish candidate is elected, the tightened liquidity will make 'value-driven' assets more resilient, such as mainstream coins like BTC and ETH, which have a large ecosystem and user base, as well as projects related to crypto payments and compliant finance, because the fundamentals of these projects are more solid and less affected by policies.
My long-term layout idea is: regardless of the outcome of the leadership change, I will maintain a long-term position of 50% allocation, mainly targeting BTC, ETH, and a small number of quality projects in the compliant crypto payment sector. In the short term, I will adjust 20% of my position based on the outcome of the leadership change: if a dovish candidate is elected, I will increase my holdings in leading projects in the Web3 sector; if a hawkish candidate is elected, I will increase my holdings in BTC and ETH. Additionally, I will pay attention to 'signals of a shift in Federal Reserve policy', such as inflation rate, unemployment rate, and GDP growth rate, which are core data that better reflect long-term policy trends than leadership change news. For instance, if the inflation rate continues to decline in the future, even if a hawkish chairman is in place, there may still be a relaxation of policy, and this would be the best time to position for a long-term market.
Finally, I want to say to friends who hold long-term: Don't let short-term fluctuations disrupt your rhythm. The change of the Federal Reserve chair is just a 'minor episode' in the long-term trend. What can truly help you make money in the crypto market is your understanding of the industry and your commitment to quality assets. If you currently feel helpless and confused in trading, and want to learn more about the crypto world and get firsthand cutting-edge information, follow me@标哥说币
