On December 1st, the Fed officially began tapering. Almost at the same time, on November 28th, the Central Bank, along with thirteen departments, reiterated the classification of virtual money as illegal financial activities. With these two significant pieces of news arriving one after another, how will the market respond?

Everyone is focused on the interest rate meeting on December 11. Whether or not to cut interest rates has become the biggest suspense ahead.

What does tapering mean? In simple terms, it means an increase in the liquidity of the dollar, resulting in more money in the market. During such times, where does the money flow? The stock market and the crypto market usually benefit. Looking at this alone, it's considered a positive signal.

But the regulatory winds from the east have come again. Virtual money has been singled out more than once or twice in recent years, and this time it is even harsher—speculative activities have also been included in the key crackdown scope. Stablecoins have been specifically mentioned, and scenarios like money laundering and fraud are being monitored more closely. Domestic unblocking? Don’t expect it in the short term.

To be honest, this wave of policies looks pretty scary, but the market reaction hasn't been that intense. Prices haven't collapsed, and everyone has a bit of confidence. Why? Because BTC is no longer just circulating among retail investors. Nasdaq-listed companies are buying it as a reserve asset, the spot ETF holdings are also significant, and the ETF market for BTC and ETH is also operating over in Hong Kong.

My judgment is: there is a correction pressure in the short-term market. The key now is to see how high the probability of a Fed interest rate cut is, as well as the subsequent economic data to be released. This information will directly affect the flow of funds and market sentiment.

The policy game is still ongoing, but the market is no longer the same as it was a few years ago.