On the night of the Fed's interest rate cut, is the crypto market "To da moon" or "landing"? Understand how interest rate cuts affect your Bitcoin and altcoins in one article --- 🔔1. Fed cuts interest rates: 25 basis points meet expectations At 2 AM Beijing time on September 18, the Fed announced a 25 basis point rate cut, lowering the federal funds target range to 4.75%-5.00%. This is the first rate cut of 2025, in line with a 96% probability expectation from the crypto market. Key details: The divergence in the dot plot is evident: among the 19 FOMC members, 10 support at least 2 rate cuts in 2025, while 9 advocate for fewer or no further cuts. Powell's statement is cautious: he emphasizes that future rate cuts will be decided "at each meeting" and will depend on economic data (employment, inflation). Political pressure is emerging: Stephen Miran, a director appointed by Trump, advocates for more aggressive rate cuts, echoing the pressure from the White House. --- 📈II. Short-term reaction of the crypto market: Is the good news exhausted or is the market starting? 1. Instant price fluctuations Bitcoin (BTC): Shortly after the announcement, it briefly fell below $115,000, but then quickly surged, reaching around $118,000. Altcoins are surging: ETH and XRP are up over 2.6%, SOL skyrocketed by 5%, with funds flowing into high-elasticity assets. 2. The contract market is experiencing severe liquidations Within 24 hours before the interest rate cut, the entire network saw liquidations exceeding 400 million USD, with 150,000 people liquidated, 80% of which were short positions, indicating that the market was betting on positive news in advance. --- 💡3. How does interest rate reduction affect the crypto market? Three main transmission pathways 1. Liquidity spillover effect Lowering interest rates reduces borrowing costs, encouraging funds to flow from low-yield money market funds (scale of $7.5 trillion) to high-risk assets, with Bitcoin and ETFs becoming the main entry points. Data evidence: BTC spot ETF has accumulated over $50 billion inflows this year, and the demand for institutional allocation further expands after the interest rate cut. 2. The weakening of the dollar and asset revaluation Interest rate cuts usually suppress the Dollar Index (DXY), boosting the appeal of Bitcoin priced in dollars. Historical pattern: During the interest rate cut cycle in 2019, BTC rose nearly 180%. If the US dollar continues to weaken this time, BTC may challenge $120,000. 3. Risk Appetite Shift Economic expectations improve, prompting investors to withdraw from safe-haven assets like gold and US Treasuries, and turn to encryption assets. The sector rotation is evident: public chain tokens such as SOL and BNB have recently increased by over 20%, with funds pouring into the "altcoin season." --- ⚠️4. Mid-term risks: Divergence, inflation, and political interference 1. The divergence in the dot plot signals volatility: There is a significant disagreement within the FOMC regarding the future path of interest rate cuts. If economic data fluctuates (such as a rebound in inflation), policy may shift to a hawkish stance. 2. Inflation stickiness risk: The CPI in August still reached 2.9% year-on-year. If Trump's tariffs raise import costs, inflation may heat up again. 3. Political intervention risk: Trump's pressure on the Fed may weaken its independence, raising market concerns about policy stability. --- 💎Five, Investor Strategy: How to Respond to a Rate Cut Cycle? 1. Short-term (1-3 months) Beware of "good news priced in": the market has already priced in interest rate cuts, and we should guard against a technical pullback. Pay attention to Powell's speech: if he releases "dovish" signals (such as hinting at continuous rate cuts), consider positioning in BTC and ETH; if he is more hawkish, prioritize taking profits. 2. Mid to long term (2026) Focusing on institutional capital flows: The speed of ETF inflows is a core indicator. If it continues to exceed $1 billion in a single week, the bull market pattern will be solidified. Bet on the "rate cut beneficiary sector": RWA (Real World Assets): such as ONDO (BlackRock endorsed); Public chain leader: SOL (institutional increase), ETH (staking rewards); Meme coins: Highly volatile varieties (such as DOGE) have strong explosive power when liquidity is ample. 3. Risk Control Bottom Line Avoid high leverage: After the interest rate cut, volatility rises, making it easy to trigger liquidation; Diversified allocation: BTC (50%) + mainstream altcoins (30%) + stablecoins (20%) to cope with drawdowns. --- 📌Summary: Interest rate cuts are a "trigger" rather than a "perpetual motion machine". The Fed's interest rate cut provides liquidity support for the crypto market, but it is by no means a guarantee of a one-sided rise. Historical data shows that the average increase of BTC during interest rate cut cycles is considerable, but it needs to overcome the two hurdles of "expectation gap" and "data verification." Key observation points for the remaining time in 2025: 1. October and December FOMC meetings: If cumulative rate cuts reach 75 basis points, BTC may hit a new high of $124,000; 2. US CPI and Non-Farm Data: If employment worsens but inflation remains controllable, the space for interest rate cuts will further open; 3. Dollar Index (DXY): Falling below 100 will trigger a global capital return to risk assets. Final reminder: Interest rate cuts are a macro tailwind, but the project's fundamentals are the anchor that crosses cycles. Do not overlook the value of the code, the strength of the team, and ecological growth in pursuit of interest rate games - this is the essence of crypto investment. Disclaimer: The above analysis is for reference only and does not constitute any investment advice. The market has risks, and decisions should be made with caution. #美联储降息25个基点##BTC战略储备市场影响##RWA赛道，你押谁#

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