When the Federal Reserve's printing press starts, the crypto circle gets rich! But be careful, this time the faucet might be connected to 'stagflation' mudslides!
Plain interpretation of Trump pressuring the Federal Reserve:
Old Trump is once again urging the Federal Reserve to cut interest rates! He calls for a reduction to '1% or even lower', and with the recent weak US employment data, the market is now betting that the probability of a rate cut in September exceeds 73%, close to 3/4! As soon as this news broke, US stocks surged, and the crypto circle followed suit—Bitcoin shot back to around $108,000!
Why the good news for the crypto circle? Three plain statements:
Money has turned into 'fur', find solid assets!
Cutting interest rates = flooding the market, making the dollar worthless. At this time, Bitcoin, as a fixed-supply 'digital gold', naturally resists inflation! Look, the US dollar index plummeted by 10.4% in the first half of this year, marking the worst record in 50 years, while Bitcoin has become a hot commodity.
Dasheng's view: Don't believe 'Bitcoin is dead', it is essentially a 'lifeboat' against fiat currency devaluation!
Institutions are entering with real money!
Under the expectation of rate cuts, listed companies are going on a shopping spree! The most notable is MicroStrategy, hoarding Bitcoin to the point of addiction, and its stock price is flying too! Now even ETH and SOL have made it onto the big companies' 'crypto treasury' list. Why? Bitcoin undergoes a halving every four years, and next year's inflation rate will only be 0.85%, much slower than the Federal Reserve's money printing speed!
Dasheng's view: Don't just focus on retail investors' calls; look at where the 'real money' of the giants is flowing!
Policy opens the green light, stablecoins take off!
The US has just passed the (Stablecoin Act), giving compliant stablecoins like USDC an 'ID card'! As soon as the news broke, the issuer Circle’s stock price skyrocketed by 482% in a month! Bitcoin/Ethereum spot ETFs are also crazily attracting funds, with a net inflow of over 2 billion dollars in a week!
Dasheng's view: Regulation is not a monster; compliance is the ticket for institutional large funds to enter!
But! Don't celebrate too early! Three major risks hang overhead:
'Wolf is coming' warning!
In case inflation explodes again, like Trump imposing a 50% tariff on the EU pushing prices up, or if employment suddenly improves, the Federal Reserve may switch from dovish to hawkish! Think back to last December: on the day the interest rate cut was announced, Bitcoin actually plummeted by 5.4%—the market loves to play 'buy the expectation, sell the fact'!
Dasheng's view: Pay close attention to the non-farm payroll data on July 4 and the tariff expiration on July 9!
Institutions are leveraging in the 'casino'!
Currently, bets on CME Bitcoin futures have hit a historical high! It's all institutions playing the 'chicken game'. Once the data disappoints, a chain of liquidations could happen in minutes! What's even scarier is: the deposit volume from retail investors at exchanges is lower than in a bear market, indicating that this wave is an 'institutional leveraged bull', with an unstable foundation!
Dasheng's view: Beware of the old trick of 'spot selling, futures harvesting'!
Stagflation 'poison' is hard to resolve!
Cutting interest rates won't cure America's 'hypertension' of 3.8% inflation + 'hypoglycemia' of negative GDP growth. Tao Chuan, a big shot at Minsheng Securities, said: Cutting interest rates might actually harm ordinary people—because Americans hold a lot of government bonds; once interest rates drop, wealth directly shrinks! Import inflation makes imported goods more expensive, which will offset the effect of rate cuts.
Dasheng's view: Cutting interest rates is a spring medicine; it cannot cure the terminal illness of stagflation! Bitcoin's 'anti-stagflation' property is the long-term logic!
Brothers, is this round of market driven by 'expectations' a castle in the air, or is it the starting point of a long bull market driven by 'institutional allocation'? The key depends on whether the Federal Reserve really cuts rates in September! But Dasheng dares to say:
'Crypto assets have become a safe haven from dollar devaluation, a reserve for corporate treasuries, and a Noah's Ark in the age of massive global liquidity!'
Now, do you dare to board the ship? Let me know in the comments!
Keep an eye on the non-farm payroll data this Friday! Dasheng will interpret it in real-time, follow me to not get lost!
Remember! The market is not wrong, we are! I am Dasheng, the top layout team, serving only ambitious individuals among the crazies!
