Is the American economic situation a crisis or an opportunity?
Recently, everyone has been focusing on two key phrases: the Big and Beautiful Act and Non-Farm Payroll data, one side shouting that U.S. bonds are about to collapse while the other worries that without interest rate cuts, the crypto market has no hope... But have you ever thought, do these so-called negative factors really change the overall situation?
1. What does the Big and Beautiful Act really talk about?
On July 1st and 4th, this act has already secured enough votes in Congress, awaiting the President's signature. The core content is actually not complicated: reduce spending by 1.5 trillion over the next ten years, and tax revenue will decrease by 4 trillion.
Sounds good? But digging deeper, it's essentially: a country that is already 36 trillion in debt is going to collect less money and spend more?
You can understand it as a person earning 10,000 a month, originally spending 5,000, now their income has dropped to 4,000, but they still need to spend 6,000 every month... Do you think this can stay stable?
Therefore, the market is scared. It's not the act itself that frightens them, but the problems it reflects: the U.S. finances are already in a deficit.
Thus, interest rate cuts are only a matter of time.
2. Is the Non-Farm Payroll data really negative?
June's Non-Farm Payrolls exceeded expectations, strong employment? Do you really believe that?
With high U.S. interest rates and hollowed-out factories, how can so many jobs be created? The data is merely a tool to influence market sentiment.
I have consistently maintained that interest rate cuts in the second half of 2024 are inevitable.
Even if there is no cut in July, it only postpones the good news to September. As long as you understand the main players' mindset, you won't waver based on news. News is not the core logic that determines the market; expectations are.
3. Stablecoins + interest rate cuts = the biggest catalyst for the crypto market.
What is truly worth noting is the implementation of stablecoin regulations and the opening of funding channels for Web 3.0.
On August 1st, Hong Kong will implement new stablecoin regulations, and the U.S. is also accelerating its legislative process for stablecoins.
Traditional financial institutions are secretly preparing their own stablecoin projects. What does this mean?
It means that in the future, all traditional funds, retail funds, and even institutional funds can seamlessly flow into the crypto market through stablecoins.
What you think lacks liquidity is actually just an elephant that hasn't turned around yet.
So, interest rate cuts are just the icing on the cake; the real core is that a new round of funding channels is about to open.
But have you ever thought: what you really fear is not market volatility, but your own cognitive uncertainty.