Dear friends in the crypto community, tonight's news is indeed explosive! Trump suddenly 'opened fire' on the Federal Reserve, pressuring Powell to cut interest rates as soon as possible, coupled with the imminent US-Europe hundred billion tariff war, global markets instantly became tense. This double shock presents an opportunity or a challenge for the crypto sphere? Below is a detailed interpretation!
First Shock: Trump Pressures the Federal Reserve
Latest news indicates that the Trump team is putting pressure on the Federal Reserve to swiftly cut interest rates. Why such urgency? On one hand, it aims to inject a strong stimulus into the economy before the elections; on the other hand, it may also be influenced by trade frictions between the US and Europe. The market's greatest concern currently is that if the Federal Reserve succumbs to pressure and takes inappropriate measures, it could lead to a depreciation of the dollar or even trigger policy chaos. This uncertainty often drives funds to seek new investment directions.
Second Shock: The US-Europe Hundred Billion Tariff War Approaches
Today there is a significant piece of news; the EU has prepared a countermeasure amounting to hundreds of billions of euros (about 117 billion dollars). The EU stated that as long as the US imposes a 30% tariff on EU goods after August 1, the EU will immediately impose a 30% heavy tax on US products like airplanes, cars, and whiskey valued at hundreds of billions. The intense confrontation between the two parties will undoubtedly bring a huge shock to the global economy.
So, what impact will these two shocks have on BTC and ETH?
Dollar credibility is questioned, and the attractiveness of crypto assets rises
Trump's intervention in the Federal Reserve has raised market concerns about the potential loss of control over US dollar policies. If the Fed is truly forced to blindly cut rates, it may weaken the credibility of the dollar. Meanwhile, BTC and ETH do not rely on any nation, have limited supply, and possess natural resistance to intervention, akin to 'hard currency' in the digital world, making them potentially much more attractive. To hedge against dollar risks, some funds are likely to flow into the crypto market.
Global situation is turbulent, and demand for hedging increases
The trade war (hundreds of billions in tariffs) and monetary policy interventions (pressuring the Federal Reserve) have brought dual uncertainties. Traditional markets (stock and bond markets) are bound to be affected. Historical experience shows that during turbulent times, the 'digital gold/silver' attributes of BTC and ETH are more pronounced, possibly becoming a 'safe haven' for more funds. It is important to note that hedging does not mean absolute safety, but merely an increase in demand.
Rising expectations for interest rate cuts are favorable for risk assets
Trump is vigorously calling for interest rate cuts, and market expectations for such cuts are indeed rising. If the Federal Reserve truly implements interest rate cuts, it will theoretically release more liquidity (increased funds in the market). These additional funds will need to find investment channels, and besides traditional markets, the crypto market, especially leading BTC and ETH, is likely to become a new choice for funds, thereby driving up their prices.
Outlook on the Future Trends of BTC and ETH
In the short term, favorable factors are continuously accumulating. Expectations for interest rate cuts (potential liquidity easing), escalation of trade frictions (increased hedging demand), and worries about US dollar policies (seeking alternative assets) may all have a potential positive impact on BTC and ETH. As core assets in the crypto market, they are likely to absorb these new demands.
Two key time points need to be closely monitored: August 1, which is the deadline for US-Europe tariff negotiations, and its outcome will directly affect the trajectory of the trade war; simultaneously, the Federal Reserve's statements at the end of July will also be crucial in determining whether Powell will yield to pressure. Market fluctuations may increase around these two time points, presenting both opportunities and risks.
In the face of a complex news environment, it is crucial to remain calm and not be swayed by emotions. In the short term, the market may experience spikes or undergo corrections. It is essential to manage positions well, avoid putting all funds in, and refrain from leveraged trading. Retaining strength is key before the trend becomes clear.
Overall, Trump's pressure for interest rate cuts and the US-Europe hundred billion tariff confrontation are two major events that may be beneficial for the crypto market, particularly BTC and ETH. Expectations for interest rate cuts, increased hedging demand, and concerns about the traditional monetary system may all drive funds into the crypto market. Although the global situation is turbulent, crises often harbor opportunities. Everyone should closely monitor market dynamics in August, operate cautiously, and grasp potential opportunities.
