In the early morning of August 5th, while Wall Street was still in turmoil over the Federal Reserve's expected interest rate cut in September, the White House suddenly dropped two 'deep-water bombs'—Trump announced he would nominate a new Federal Reserve governor and the head of the Bureau of Labor Statistics within 72 hours! This news instantly ignited global markets, with Bitcoin's short-term volatility soaring by 15%, gold futures breaking through the $2,500 mark, and the dollar index plunging by 0.8%. Behind this personnel earthquake lies the wealth code for the cryptocurrency market in the next decade!

One, labor bureau leadership change: The political game behind the 'Rashomon' of employment data

Trump's move against the Bureau of Labor Statistics had long been anticipated. On August 1, he directly fired Director Erica McEntyre under the pretext of 'falsifying 2024 election employment data' and swiftly appointed Deputy Director William Viatroski as acting director. This action was interpreted by the market as 'paving the way for interest rate cuts'—after the new director takes office, the July non-farm data was significantly revised down from an initial value of 114,000 to 73,000, and the unemployment rate rose to 4.2%, directly contradicting the Federal Reserve's narrative of an 'economic soft landing.'

Impact on the cryptocurrency market:
Employment data is the 'Holy Grail' of Federal Reserve decision-making. If the new director continues to release pessimistic signals, the probability of a 50 basis point rate cut in September will soar from 35% to 70%, triggering a massive migration of dollar assets. Historical data shows that after the Federal Reserve's emergency rate cuts in 2020, Bitcoin surged 230% within three months. If this coincides with the regulatory benefits for stablecoins from the (Genius Act), USDT, USDC, and other dollar stablecoins may become the new vehicles for global safe-haven funds, pushing the total market value of the cryptocurrency market to exceed $5 trillion!

Two, changes in Federal Reserve governance: Is the Powell era coming to an end?

Even more unsettling for the market is that Trump simultaneously stated, 'I will choose the next Federal Reserve chairman from three or four candidates!' Although current chairman Powell's term lasts until 2026, Trump has repeatedly publicly criticized him for 'delaying interest rate cuts' and being 'politically hijacked,' even claiming 'I can do better than these people.' The market widely speculates that former Federal Reserve governor Kevin Walsh or economist Stephen Moore will be popular candidates to take over—both are known for their 'dovish' stance, advocating 'using cryptocurrencies to counter the hegemony of central bank digital currencies.'

Impact on the cryptocurrency market:
If the new chairman promotes three things after taking office:

  1. Accelerating the inclusion of stablecoins into the Federal Reserve payment system: Currently, only one institution has been approved for a master account. If more licenses are opened in the future, stablecoins will directly compete with dollar cash, becoming a new tool for global trade settlement;

  2. Suspending CBDC development: Trump has signed an executive order prohibiting the Federal Reserve from issuing a digital dollar, which frees up policy space for decentralized assets like Bitcoin;

  3. Incorporating Bitcoin into national strategic reserves: In line with previous statements about 'establishing a digital asset committee,' the U.S. may follow El Salvador's example and use Bitcoin to repay part of its national debt, completely igniting market sentiment!

Three, how should retail investors position themselves? Three major signals have emerged!

  1. The stablecoin sector is about to explode:
    (Genius Act) requires stablecoins to be 100% backed by US dollars or short-term US Treasury bonds, and mandates monthly audits. This means that institutions like USDT and USDC will accelerate compliance, and their parent companies Circle and Tether may take the opportunity to list on NASDAQ, driving related concept coins to surge.

  2. Bitcoin ETF fund flow reversal:
    As the Federal Reserve shifts to a dovish stance, institutional funds are flowing from gold ETFs to Bitcoin ETFs. BlackRock data shows that in the first week of August, Bitcoin ETFs saw a net inflow of over $1 billion, while gold ETFs experienced a net outflow of $500 million. If interest rate cuts materialize, this trend will accelerate.

  3. Altcoins 'distinguishing the genuine from the fake':
    Under regulatory scrutiny, 90% of worthless coins will go to zero, but projects with real application scenarios will see explosive growth. Pay special attention to tokens linked to US Treasuries and real estate; they may become the 'new favorites for hedging' under the new Federal Reserve policy.

Trump's 'late-night personnel change' is essentially a 'conspiracy' against the global monetary system—using stablecoins to consolidate dollar hegemony, using Bitcoin to counter central bank digital currencies, and using the cryptocurrency market to absorb excess liquidity. For Chinese investors, this is both a challenge and an opportunity. Remember: during periods of dramatic policy changes, compliant leaders + hardcore technology are the Noah's Ark to navigate bull and bear markets!

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