Fed cuts interest rates, is the crypto world in a frenzy or cooling off?

Family, as soon as the news of the Fed's interest rate cut came out, the crypto world exploded! Is a big market coming, or is there a hidden crisis? Today, let's have a good chat.

First, looking at the positive side, interest rate cuts mean that there is more money in the market and it is cheaper. For the crypto world, lower funding costs mean that funds that were originally sitting in banks or government bonds will be unable to resist and will come looking for high-yield investment channels, making the crypto world very attractive. A large influx of new funds will directly give coin prices a "shot in the arm." Moreover, interest rate cuts will also trigger inflation expectations, as everyone is worried that the money in their hands is becoming less valuable. Bitcoin, known as "digital gold" and possessing anti-inflation properties, will be highly favored, with a continuous influx of funds driving up prices. Additionally, interest rate cuts often lead to a depreciation of the dollar, prompting international capital to seek new safe havens globally. As a global investment target, crypto assets have the opportunity to attract more international funds, further pushing up coin prices.

However, this interest rate cut is not entirely a good thing. A large amount of capital pouring in can easily overheat the market, creating bubbles where asset prices far exceed their actual value. Once the bubble bursts, the scene is simply unimaginable; coin prices could plummet. Moreover, the reason the Fed is cutting interest rates is likely due to downward pressure on the economy, and the global economic downturn will lower investors' risk appetite. When facing high-risk assets in the crypto world, they will be even more cautious. Additionally, as the market size of the crypto world continues to grow, regulatory agencies are paying more and more attention. The market fluctuations caused by the interest rate cut may lead to further regulatory tightening, bringing more uncertainty to the crypto world.

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