Historically, interest rate cuts are often a precursor to financial crises, but is it possible for us to avoid a repeat of history this time?
At present, the market generally predicts that the Fed may implement another 50 basis point interest rate cut at the upcoming meeting, and the probability of this expectation has reached 45.7%, and this number is still rising. This reflects that the market may underestimate the Fed's determination to further cut interest rates. If the Fed really cuts interest rates by 50 basis points twice in a row, accompanied by possible interest rate cuts in the future, the liquidity in the market will increase significantly. At the same time, affected by the interest rate cut, the value of the US dollar and USDT has declined, from 7.3 a few months ago to 6.8 at present, indicating that the purchasing power of holding US dollar assets is decreasing.
In this environment, the interest rate cut is actually prompting investors to turn their US dollars or USDT to other assets, especially those that are more sensitive to interest rate changes, such as US stocks and cryptocurrencies. Therefore, investors cannot ignore this trend.
It is expected that trillions of dollars will flow from the traditional banking system into the cryptocurrency market in the future. The reason is very direct: the depreciation of the US dollar means that if you don't invest, you will face asset losses. Smart investors on Wall Street will certainly seize this opportunity, and as interest rates fall, financing costs will also decrease, and investors may increase their investment through borrowing and leverage. This is exactly the logic behind the Fed's interest rate cuts that may trigger a bull market.
