I. How do expectations of rate cuts catalyze the altcoin season?
1. Liquidity release and recovery of risk appetite
The probability of the Federal Reserve cutting interest rates by 25 basis points in September has reached 83.6%, while institutions like Morgan Stanley predict a cumulative rate cut of 50 basis points by the end of the year. This easing expectation is directly driving the $7.2 trillion money market fund to seek higher yield targets. Historical experience shows that after the Fed cut rates in 1998, the Nasdaq index rose by 134.6%, and Ethereum's increase exceeded 100 times during the rate cut cycle in 2017, confirming the explosive potential of risk assets driven by liquidity.
The current crypto market has shown signs of capital rotation: Bitcoin's market share decreased from 65% in May to 59%, and the total market cap of altcoins grew by over 50% to $1.4 trillion since early July. Although the CMC Altcoin Season Index remains below the threshold of 75, the ETH/BTC exchange rate is approaching a historic high of 0.08 from 0.04, indicating that capital is migrating from Bitcoin to leading altcoins. 2. Institutional funds and narrative-driven structural bull markets: Institutional allocation to Ethereum has become a key catalyst. As of August 13, leading ETH treasury companies hold 2.95 million ETH (2% of total supply), with Bitmine alone planning to increase holdings through $20 billion in financing. The rise of 'Digital Asset Treasuries' (DAT) is essentially a new treasury management strategy where companies integrate crypto assets into their balance sheets. At the same time, the tokenization of real-world assets (RWA) and liquid staking narratives (such as LDO) are accelerating, pushing the Beta value of ETH ecosystem-related tokens (such as ARB and OP) above 1.5.
Coinbase points out that September may become a critical point for the full launch of the altcoin season, with three signals worth watching:
The Fed's rate cut leads to an increase in the opportunity cost of cash reserves, prompting funds to shift from money markets to crypto assets;
ETH ETF scale exceeds $22 billion: The stability of institutional holdings provides liquidity support for altcoins;
Layer 2 expansion solutions implemented: Reducing transaction costs, attracting retail participation in decentralized finance (DeFi).
3. Risks and differentiation: From broad increases to selective tracks
The current altcoin season shows a divergence of 'indicator lethargy - market cap skyrocketing', reflecting that the market has shifted from the 'all coins soaring' of 2017 to structural opportunities. Capital is more inclined to flow into projects with real cash flow (such as RWA protocol ONDO), compliance prospects (such as SEC-recognized LDO), or technical advantages (such as trading applications on the SEI network). Long-tail assets lacking fundamental support may face marginalization risks, necessitating vigilance against sell-off effects triggered by institutions.
II. How does the rate cut reshape the logic of treasury stocks?
1. Traditional Treasury Stocks: Decreasing financing costs and policy support
Rate cuts directly reduce the funding costs for companies to repurchase stocks. In July 2025, the amount repurchased by Chinese listed companies reached 14.012 billion yuan, exceeding 10 billion for four consecutive months, with companies like Midea Group and TCL Technology implementing repurchases through special loans. This 'repurchase increase and re-loan' policy has brought corporate financing costs to historic lows, with 323 companies already obtaining special loan limits of 91.9 billion yuan this year.
In the Hong Kong stock market, companies like Tencent and HSBC have repurchased over HKD 200 billion cumulatively in 2024, driving stock prices to rise significantly after the rate cut. This validates the transmission path of 'low interest rates → low-cost financing → buybacks boost EPS → stock price increase'. If the Fed cuts rates in September, US stock companies (especially tech giants) are expected to set new records for buyback scales. 2. Crypto Treasury Stocks: From Bitcoin to Ethereum paradigm shift, the 'Bitcoin treasury stock' model represented by MicroStrategy is being replaced by 'Ethereum treasury stock'. Companies like Bitmine and Sharplink raise funds by issuing stocks or convertible bonds to purchase ETH, forming a reflexive cycle of 'buy coins → stock price rises → refinancing'. The core of this model is whether the P/NAV (price-to-net-asset ratio) maintains a premium. Currently, the P/NAV of leading ETH treasury stocks is still above 1, but if FASB accounting standards require that crypto assets be measured and recognized at fair value, it may exacerbate financial report volatility and affect market valuations. 3. Potential Impact of Regulation and Accounting Standards Traditional treasury stocks face lower regulatory risks, but crypto treasury stocks must cope with dual challenges:
SEC's qualitative assessment of staking yields: If liquid staking is classified as securities, the compliance of tokens like LDO will be questioned;
New accounting regulations for crypto assets: Starting from the fiscal year 2025, unrealized gains and losses on crypto assets must be directly included in the income statement, which may lead to significant fluctuations in corporate financial reports.
III. Investment Strategies and Risk Alerts
1. The core track of altcoin season layout
Layer 2 and Scaling Solutions: Tokens like ARB and OP benefit from the expansion of the Ethereum ecosystem;
RWA and DeFi: ONDO (tokenization of US Treasury), AAVE (lending protocol), etc., have cash flow support;
AI + Blockchain: Projects like DYM in modular settlement layers respond to the explosion in computing demand.
2. Value re-evaluation opportunities for treasury stocks
Traditional Enterprises: Focus on consumer leaders (such as Moutai) and technology giants (such as Apple) with large share buybacks and high dividend yields;
Crypto Treasury Stocks: Prioritize companies with healthy cash flow and stable staking yields (such as publicly traded companies holding ETH), avoiding targets overly reliant on equity financing.
3. Key points for risk control
Macroeconomic uncertainty: If inflation rebounds and leads to a halt in rate cuts, high-leverage positions may trigger a chain reaction of liquidations;
Regulatory policy fluctuations: Delays in SEC's approval of altcoin ETFs and the EU's tax policy on crypto assets may impact the market;
Technical signals: Closely monitor Bitcoin's dominance (BTC.D), the proportion of open contracts in altcoins, etc., to avoid chasing prices at emotional peaks.
Expectations of rate cuts are catalyzing both the altcoin season and treasury stocks through liquidity release and declining financing costs. For the crypto market, September may become a critical window for transitioning from early rotations to a full bull market, with a focus on signals like the ETH/BTC exchange rate breakout and Federal Reserve policy statements; for the traditional market, the logic of corporate buybacks and valuation recovery still holds, but caution is needed regarding disturbances from changes in policy and accounting rules. Investors should adopt a 'selected tracks + dynamic balance' strategy, enjoying liquidity dividends while avoiding risks of narrative withdrawal and regulatory black swans.
Old Jie only conducts real trading; the team still has positions to enter $BTC $ETH.