Powell is playing dumb, and the crypto world got a breather! But a bigger storm is brewing behind the scenes!
What's going on? Early this morning, Federal Reserve head Powell came out to speak, and everyone was all ears waiting for him to mention rate cuts, inflation, or even just touch on cryptocurrencies. What happened? He read the whole time! He was busy reviewing how great the Federal Reserve has been over the past 75 years (handling the Latin American crisis, the 2008 financial storm), but about the current market concerns: Will rates be cut? How's inflation? Is employment okay? Not a word on any of it! Playing dumb! Why? Because he is also anxious, waiting to see Friday's U.S. non-farm payroll data, which is a key indicator for judging the economy's health. The Federal Reserve is also having a big meeting on June 17, so right now they are holding their positions and waiting for a big move.
What impact does this have on our crypto world?
Thank goodness he didn't slam Bitcoin! Old drivers remember last December, right? Powell said, "The Federal Reserve will never buy Bitcoin," and BTC immediately crashed by 5%, breaking $100,000 instantly. This time he didn't name names to criticize, so we can consider ourselves lucky; the market didn't take a hit for now.
Is the dollar going to cause trouble? He directly said, "The dollar may fluctuate violently"! This is no small matter! Think about Trump shouting about increasing tariffs; if he really does, it will push up U.S. prices (inflation). If the dollar jumps around, Bitcoin, this "digital gold," might become everyone's bulletproof vest (safe-haven asset), and its price could soar!
The hope for rate cuts is still alive! Although Powell doesn't say it, other Federal Reserve officials have hinted: If Trump's tariffs aren't that harsh, there could be significant rate cuts in the next year! Later this year, there might also be "good news style rate cuts" (for example, if inflation really goes down). Guys, rate cuts = massive liquidity! Where does all that water flow? Risk assets like BTC have a chance to rise along with it! This is potential "big profit."
Trump VS Powell: The ultimate arm wrestling match! Doesn't Trump want to establish a "national Bitcoin reserve"? Powell directly hit back last year saying, "The law doesn't allow purchases." If Trump really comes to power this year and pushes a bill forcing the Federal Reserve to buy coins, it won't be easy for Powell. But if Congress really forces it through, it would be like opening the floodgates for traditional funds, just imagine that scene!
What should we do now?
Short term (just these few days): relax, don't operate recklessly! Keep a close eye on Friday's non-farm payroll data (Is employment good or not?) and the Federal Reserve meeting on June 17th. If the data is poor (indicating a weak economy), the expectations for rate cuts will rise, which is good for the crypto world!
Long term: Beware of Trump’s tariffs blowing up the dollar. If it really happens, BTC might become a "safe box," at that time consider bottom fishing. Also, keep an eye on the "rich" sovereign funds in Asia and the Middle East; they are more likely to secretly buy BTC, they are big players with real money!
Powell is playing dumb, but the expectations for rate cuts + the Trump storm are two bombs already on the way! The market will be absolutely stimulating in the second half of the year; those with weak hearts should take it easy! Hold on to your spot holdings (don't sell easily), and don't recklessly leverage contracts (easy to blow up)!
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