The Clear Act wasn’t passed last night. The final vote was 49:50—none of the Democrats voted for it, and some Republicans also voted against it. That led to a drop in the crypto market: Bitcoin plunged to just below the 75,000 yuan level, and Ethereum fell below 2,360.
Looking at the overall news situation right now (the Clear Act), the probability of it being passed within this year is extremely low. We can only wait until next year. After the meeting, an official raised the possibility of reconsideration, which keeps the door open for further deliberation. So this spark is still there.
So the most important thing is tonight’s FOMC. If interest rates are raised tonight, then whether it’s US stocks, crypto, or gold, they’ll all drop by another leg. Bitcoin could potentially go to 7.2, and Ethereum could potentially go to 2.2.
But in the short term, this is actually a great spot to get in. BTC has been falling for nearly 10,000 points continuously. From the high of 8.2 it’s dropped—if ETH goes from its high of 2660 down to 2200, that’s a 400-point drop, about a 15% pullback. No matter what, it should bounce a bit. The probability of a straight-line dump down from here is not high.
I still like the long-term outlook. After all, this surge upward has already given many people an opportunity who didn’t get on earlier. In general, Q4 usually sees good performance in the US stock market. Of course, unless the Federal Reserve announces a second rate hike—then the US stock market could get ugly. But I think the probability of two rate hikes is quite low.
One other big piece of news today is that the ARC chain has launched (ARC is the main chain of crcl). Because the RH chain was so popular before, many people are eyeing ARC chain launch platforms. Right now, quite a few high-market-cap memes have already run on the ARC chain. For example, ARGUS peaked at over 30 million market cap, and TOLLY reached about 20 million.
Because many people missed out on memes like pons from the RH chain earlier, I guess that during this ARC wave, a lot of people will end up falling into the trap. First, the overall environment is different from before: back then, BTC and Ethereum were exploding, and everyone thought a bull market was here. There was a massive inflow of funds and high activity.
Right now, BTC and ETH are retracing. Compared with before, funds are more cautious, so the hype might not be as strong as on the RH chain.
The second reason is that there’s been a huge influx of launchpad platforms on ARC. For example, the ones that were popular before on the RH chain—like long, pump, and also some native platforms—are all seeing many developers come in.
The more platforms there are, the easier it is for funds to get dispersed. This principle is actually quite common in real life too: if one person’s business catches on, many people will copy it. But once too many people do the same thing, the supply-demand balance gets worse, and then the business gets worse too.
Also, since the broader environment isn’t great, I feel you still need to be very careful. You can play with small money, but don’t go in expecting to turn it into a big pile of profit. It’s better to focus on the leaders.
History always repeats itself countless times: something gets popular, and then the second wave basically fizzles out.
Lastly, it all depends on how tonight’s FOMC meeting turns out. The past two days have had extremely large fluctuations—pay attention to risk management. Safety is always the top priority. For those who haven’t gotten on yet, watch for second-chance opportunities; if you do get on, don’t get off carelessly. There will definitely be another “second wave” later—be patient and wait.
