Today is May 6, 2025, Tuesday. Yesterday, the US stock market dipped a bit after opening, and Bitcoin also retraced, now hovering around $94,000. From the news perspective, there aren't any particularly bad news. Tomorrow, the Ethereum Prague upgrade is finally going live on the mainnet. The market has largely digested this upgrade already; in late March, due to upgrade issues, Ethereum even dropped to $1,380. Although it has been postponed several times, this time it is really coming. After the upgrade is implemented, major institutions will likely take action, and the SEC is expected to quickly approve Ethereum ETF staking. The biggest benefit of this upgrade is the scalability, allowing large institutions to stake more Ethereum, enhancing both security and convenience.
Some say, "The good news landing is bad news," which is both right and wrong. The key is to see whether this good news is a one-time event. For example, Bitcoin halving is also good news, but it is a long-term benefit for future market conditions. If you only act based on the phrase "The good news landing is bad news," you will miss every significant market movement. Therefore, investment cannot be based solely on slogans; it is essential to research the fundamentals deeply and determine whether this good news is short-term or long-term.
The Federal Reserve is holding a meeting early Thursday morning, and it is almost certain that there will be no interest rate cut in May. Now everyone is guessing whether there will be a cut in June or July. From the data, the probability of no rate cut in May is as high as 97.6%. Recent economic data also shows that the Fed is not in a hurry to cut rates, and this expectation has already been digested by the market. Now everyone is more concerned about what Powell will say.
The market is currently guessing when the Federal Reserve will stop tapering. The most plausible statement is that it might stop in June or July. However, even if tapering stops, for the Fed to start easing again, it would require a significant economic issue to occur. It is important to differentiate between two concepts: balance sheet expansion is ordinary liquidity provision, while QE is equivalent to being on a ventilator. With interest rates still at 4.5%, unless the economy collapses, there is no need for QE. The historical record for the fastest rate cut is 14 months, and given the current situation, the economy is unlikely to collapse that quickly. However, if Trump comes up with some new tactics, that could change.
Regarding altcoins, the current situation is that there are too many new coins, and they start with a high market cap while their numbers keep increasing. This results in little funding focus on altcoins, which are instead diverted by these new coins. Currently, altcoins rely on Ethereum and Bitcoin for sentiment, but Ethereum itself is overwhelmed, and Bitcoin is also seeing sentiment fluctuations, with both rising and falling quite randomly, making it hard for altcoins to keep up, often following the decline but not the rise. Therefore, even if there are significant market movements in the future, not all altcoins will rise; choosing coins is crucial. The competition in the cryptocurrency market is intense, and if a coin doesn't have new hotspots to attract funds, it will quickly lose consensus and its market cap will shrink rapidly. A year ago's race may only have one leader still holding on, while others have disappeared.
Binance has been frequently issuing airdrops and hosting TGE wallet activities, which seem to be providing benefits to retail investors, but in reality, many airdrops directly open for spot trading an hour after launch, which is no different from issuing new coins. In the short term, it seems like a bit of money has been made, but in the long term, this money is likely to be lost on other altcoins. Instead of being greedy for these small benefits, it is better to hope for the overall improvement of the industry.
I'll keep it simple for today; see you next time!