#中美贸易磋商 The Fed's interest rate cut meeting has entered the countdown, with only 3 days remaining. Many people are confused: "What is the connection between interest rate cuts and the performance of the crypto assets market?" In fact, the principle behind this is very straightforward—when funds cannot find high-quality investment channels, some will flow into the crypto assets market. This logic is simple yet real.

First, interest rate cuts will lead to a decrease in the attractiveness of traditional low-risk financial products. In the past, people were accustomed to depositing funds in banks or purchasing government bonds to earn interest income steadily; however, after the interest rate cut, the interest rate may be halved, with the interest on 100 yuan for one year dropping from 3 yuan to 1 yuan. This makes the strategy of keeping funds "lying flat" no longer cost-effective. Investors will inevitably reallocate their funds in search of more lucrative investment opportunities.

Secondly, Crypto Assets have become a new direction for funds as a high-risk, high-return investment choice. Although Bitcoin, Ethereum, and other Crypto Assets are highly volatile and concerning during downturns, the returns during upswings are equally exhilarating. When the return rates on low-risk investments decline, funds pursuing high returns naturally turn their attention to the Crypto Assets market—even those who typically prefer stable investments may take out a portion of their funds to enter this field, hoping for profits from price increases.

It is worth noting that "interest rate cut expectations" often have a greater impact on the market than actual interest rate cut actions. The Crypto Assets market tends to react to future expectations; as long as investors anticipate a sustained interest rate cut in the future, they will act in advance. For example, if the market expects two interest rate cuts within six months, many investors will preemptively invest funds into the Crypto Assets market, hoping to profit when subsequent capital inflows drive up prices. This "running ahead" phenomenon often causes Crypto Assets to start rising before the interest rate cuts, preemptively digesting market expectations.

Ultimately, interest rate cuts do not directly inject funds into the Crypto Assets market, but rather encourage funds that were originally in low-risk areas to seek new avenues, some of which flow into Crypto Assets, thereby pushing prices upward. $BTC $ETH