Why, even though rate hike expectations have fallen, I still don’t think liquidity is already loose?
Recently, the market has shown a very interesting phenomenon.
U.S. employment, consumption, and inflation data have started to cool, and expectations that the Federal Reserve will continue hiking rates have clearly dropped.
Under the old, simple logic:
No rate hikes → risk assets benefit → Crypto should rise.
But when you look at the actual funding environment, you’ll find it’s not that simple.
The yield on the U.S. 10-year Treasury is still around 4.7%, and the 30-year is even above 5%.
This means:
The fact that policy rates are no longer rising doesn’t automatically mean that the cost of funds in the market has dropped significantly.
For Crypto, I now distinguish three concepts:
① Tightening stops
The Fed stops continuing to hike rates.
That only means: “the headwind is not getting stronger.”
② Financial conditions truly loosen
Long-end yields fall, the U.S. dollar weakens, financing costs decline, and risk appetite starts to recover.
③ Liquidity truly enters Crypto
ETF inflows keep coming in, stablecoin supply grows, and spot demand strengthens—only then might it further spread to ETH and DeFi.
These three things are not the same.
So recently I won’t do this just because:
“Maybe there won’t be a rate hike in September.”
and immediately conclude:
“A liquidity bull market is here.”
BTC returned around $64,000 near August 18, but the market is still waiting for more persistent confirmation of capital.
I’d rather wait for:
Tightening stops
→ financial conditions loosen
→ growth in new Crypto capital
→ BTC confirmation
→ ETH / DeFi spread
What’s truly worth paying attention to isn’t:
When the Fed will stop pressing the brakes.
But rather:
When capital will truly start pressing the accelerator.
#Bitcoin #DeFi #美联储 #流动性 #Crypto
Recently, the market has shown a very interesting phenomenon.
U.S. employment, consumption, and inflation data have started to cool, and expectations that the Federal Reserve will continue hiking rates have clearly dropped.
Under the old, simple logic:
No rate hikes → risk assets benefit → Crypto should rise.
But when you look at the actual funding environment, you’ll find it’s not that simple.
The yield on the U.S. 10-year Treasury is still around 4.7%, and the 30-year is even above 5%.
This means:
The fact that policy rates are no longer rising doesn’t automatically mean that the cost of funds in the market has dropped significantly.
For Crypto, I now distinguish three concepts:
① Tightening stops
The Fed stops continuing to hike rates.
That only means: “the headwind is not getting stronger.”
② Financial conditions truly loosen
Long-end yields fall, the U.S. dollar weakens, financing costs decline, and risk appetite starts to recover.
③ Liquidity truly enters Crypto
ETF inflows keep coming in, stablecoin supply grows, and spot demand strengthens—only then might it further spread to ETH and DeFi.
These three things are not the same.
So recently I won’t do this just because:
“Maybe there won’t be a rate hike in September.”
and immediately conclude:
“A liquidity bull market is here.”
BTC returned around $64,000 near August 18, but the market is still waiting for more persistent confirmation of capital.
I’d rather wait for:
Tightening stops
→ financial conditions loosen
→ growth in new Crypto capital
→ BTC confirmation
→ ETH / DeFi spread
What’s truly worth paying attention to isn’t:
When the Fed will stop pressing the brakes.
But rather:
When capital will truly start pressing the accelerator.
#Bitcoin #DeFi #美联储 #流动性 #Crypto