Let's review the historical impact of the Fed's interest rate cuts on the Crypto Assets market and based on this, forecast the possible trends of this cycle.

1. Historical Trend Review
1. 2019 Rate Cuts: Expectations Lead, Outcomes Diverge In 2019, the Fed made three rate cuts, each by 25 basis points. Under the stimulation of this easing policy, Bitcoin reacted early to liquidity expectations, rising from $3,800 to $13,000 before June. However, after the actual rate cuts were announced, the market entered a profit-taking phase, and Bitcoin fell back below $7,000 by the end of the year. This indicates that policy expectations are often priced in ahead of time, and one should be cautious of volatility and corrections when the official announcement is made.
2. 2020 Rate Cuts: Panic Hits Bottom, Liquidity Fuels Bull Market In 2020, in response to the pandemic, the Fed urgently cut interest rates by 150 basis points and launched quantitative easing, pulling rates back to the zero range. The market's initial reaction was a panic sell-off due to liquidity tightening—during the "312" event, Bitcoin plummeted to $3,800. However, as liquidity surged into the market, it quickly rebounded in a V-shape, eventually initiating an epic bull market. Bitcoin reached a new high of $69,000 in November 2021, and Ethereum surged from a low of $90 to nearly $4,800.
2. Market speculation on this round of interest rate cuts
The market currently widely expects the Fed to cut interest rates by 25 basis points, which has become a consensus. Historically, interest rate cuts do not necessarily directly boost coin prices; rather, they tend to work indirectly by changing the flow of funds and market sentiment. The following points are worth noting:
· Beware of "Buy the Rumor, Sell the News" Although the interest rate cut is generally favorable for risk assets, it is important to note that there may be short-term selling pressure after the policy is implemented. Referring to 2019, after the interest rate cut was announced, Bitcoin corrected over 15% within a week. The current market has partly reacted to expectations in advance, and it is necessary to guard against a technical pullback after the good news is realized.
· Mainstream coins or more favored by funds Bitcoin and Ethereum, as the cornerstones of the crypto market, are likely to become the preferred allocation targets for institutional funds. The ongoing advancement of Bitcoin spot ETFs, as well as Ethereum's staking yields and Layer2 ecosystem progress, add extra appeal. If traditional financial markets come under pressure again due to debt or inflation, crypto assets are expected to become a new generation of "safe haven assets."
· Beware of "good news fully priced in being bad news". After the policy becomes clear, the market attention may shift back to the fundamentals. Whether the rise continues still needs to observe whether the macro environment truly warms up and whether new funds enter the market in large amounts. Past cycles remind us that over-reliance on single event speculation is often less stable than sustained capital inflows and ecological development support.
In summary, the Fed's interest rate cuts are a long-term positive for crypto assets, but short-term volatility is unavoidable. It is recommended to view policy events rationally, seize structural opportunities, and always maintain risk awareness.