Brothers, the financial circles have been in an uproar lately! Will the Federal Reserve cut interest rates in December or not? Institutions are divided into two camps arguing fiercely, but most institutions (like ING, Deutsche Bank, etc.) are still betting on 'continuing to cut'! This is hugely impactful for us in the crypto space, and today, Maple Leaf will clarify this for everyone and share some practical strategies!
1. What does the Federal Reserve's interest rate cut vs. no cut mean for the crypto space?
If there are interest rate cuts:
As the dollar increases in the market, funds may flow towards high-risk assets like Bitcoin and Ethereum! Looking back at history, every time the Federal Reserve injects liquidity, there is often a trend in the crypto space. For example, after the rate cuts in 2020, Bitcoin surged from a few thousand dollars to $60,000! If there are cuts this time, mainstream coins may rebound first.
If there are no interest rate cuts:
The market may fluctuate in the short term, but don't panic! Inflation data and employment data are still uncertain, and the Federal Reserve may also be holding back a major move. The fluctuation period is actually an opportunity for layout, and it mainly depends on how you operate!
2. What should retail investors do? Maple Leaf's exclusive suggestions!
1. Don't bet on direction, allocate reasonably!
Rate cuts are not guaranteed; institutions like Nomura Securities also believe that cuts may not happen. Do not go all in! It is recommended that mainstream coins (BTC, ETH) account for 50% of your position, keep 30% in cash for opportunities, and use the remaining 20% for some potential altcoins (choose those with real applications!).
2. Keep a close eye on these two signals!
Non-farm employment data: If employment data is weak, the probability of rate cuts skyrockets, and the crypto space may ignite instantly!
Powell's speech: This big guy shakes the market every time he speaks, so reduce some leverage before the next speech to avoid liquidation!
3. Case reference: Learn from the 'smart money'
Large institutions like JPMorgan predict rate cuts while quietly increasing their holdings in blockchain assets! Retail investors can follow trends but should not blindly follow; dollar-cost averaging into mainstream coins and accumulating at low levels is more prudent than chasing highs and cutting losses.
3. Maple Leaf's personal view: opportunity outweighs risk!
Don't be fooled by the heated arguments among institutions; the door to interest rate cuts by the Federal Reserve isn't completely closed! The current position in the crypto space isn't high, with Bitcoin still fluctuating over $30,000, leaving limited downside. Even if there are no rate cuts in December, the expectation of cuts next year will support the market. Key point: don't panic sell on the dips, and don't get overly excited on the rises; grid trading and dollar-cost averaging can help you smooth out risks!
