Content of Powell's Speech on July 31, 2025, at 2:30 AM and Its Impact on the Cryptocurrency Market

1. Speech Content

1. Interest Rates Unchanged

The Federal Reserve will maintain the benchmark overnight rate in the range of 4.25%-4.50%, marking the fifth consecutive meeting without changes. This decision process experienced rare dissent, with two board members opposing it, arguing that the current monetary policy is too tight.

2. Economic Situation Assessment

The statement notes that the unemployment rate remains low, the job market is still robust, but economic growth has "slowed somewhat" in the first half of the year. It also emphasizes that "uncertainty regarding the economic outlook remains high," with inflation and employment targets facing risks, and it did not specify when interest rate cuts might occur.

2. Impact on the Cryptocurrency Market

1. Strengthened Expectations of Liquidity Tightening

Powell did not signal a rate cut, making it difficult for the market to see a significant influx of capital in the short term. The cryptocurrency market lacks funding momentum, putting downward pressure on the prices of Bitcoin (BTC), Ethereum (ETH), etc.

2. Significant Increase in Volatility

Powell's speech, combined with other macro variables, makes the cryptocurrency market prone to severe fluctuations. Short-term bullish and bearish dynamics are becoming increasingly pronounced, making it harder for investors to operate. Many face the situation of “getting trapped when buying in, and rebounding when selling out.”

3. Enhanced Compliance Expectations for Stablecoins

Previously, Powell emphasized that the regulatory framework for stablecoins is being advanced, and there is a need to guard against “regulatory arbitrage.” Although this was not a major focus this time, stablecoins have attracted regulatory attention, which may help establish a safer trading system in the long term and clear obstacles for institutional entry. However, mainstream stablecoins may face regulatory challenges in the short term.

4. Divergent Market Sentiment

Short-term traders are being cautious and risk-averse due to increased uncertainty, while medium- to long-term investors see stable policy signals and begin to position themselves for quality coins and ecological assets. Market sentiment is difficult to unify, leading to increased volatility.