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Recently, the crypto world has been rattled again by the Federal Reserve topic. Trump publicly called on the Fed to follow suit and cut interest rates when the stock market rises, which has caused quite a stir on Wall Street and in the crypto market.
Honestly, the logic behind this isn't complicated. The Fed's interest rate policy directly determines where money flows. Think about it—when interest rates are high, traditional financial products offer good returns, and large funds naturally flow back into safe assets like stocks and bonds. But once the Fed starts cutting rates, the situation reverses—money has nowhere to go, so it begins seeking yield opportunities. The crypto market, as a higher-risk but potentially higher-reward option, naturally attracts a wave of capital inflows.
During a rate-cutting cycle, increased liquidity means what for cryptocurrencies? Simply put, it creates fertile ground for price increases. Historical data repeatedly confirms this. Conversely, if high interest rates are maintained, funds comfortably stay in traditional finance, and the crypto market faces pressure.
The current question is whether Trump's words can truly shake the Fed. Historically, political pressure and market expectations often indirectly influence policy implementation. Even with the Fed's independence, once market expectations of easing policies form, they can drive capital flows to adjust accordingly. In this sensitive period, the crypto market is especially sensitive to macro policy shifts; even slight changes in interest rate expectations can trigger price volatility.