Key risks to note regarding the Federal Reserve's Bitcoin reserves
Key risks to note regarding the Federal Reserve's Bitcoin reserves
1. Huge market volatility risk:
Even if the Federal Reserve buys in, the operation itself (timing, scale, pace), subsequent policy statements, and market overinterpretation or unmet expectations can trigger extreme price volatility. Retail investors are prone to making erroneous decisions out of panic or greed during sharp fluctuations, resulting in significant losses.
2. 'Greater fool' risk and market manipulation concerns:
News of the Federal Reserve's purchase will inevitably lead to a price surge. If retail investors blindly chase prices, they may buy at a short-term peak. It is necessary to be wary of whether the Federal Reserve's buying behavior will be exploited by the market for manipulation or to 'harvest the crop'. Large institutions may take advantage of the news to inflate prices and offload their positions.
1. Huge market volatility risk:
Even if the Federal Reserve buys in, the operation itself (timing, scale, pace), subsequent policy statements, and market overinterpretation or unmet expectations can trigger extreme price volatility. Retail investors are prone to making erroneous decisions out of panic or greed during sharp fluctuations, resulting in significant losses.
2. 'Greater fool' risk and market manipulation concerns:
News of the Federal Reserve's purchase will inevitably lead to a price surge. If retail investors blindly chase prices, they may buy at a short-term peak. It is necessary to be wary of whether the Federal Reserve's buying behavior will be exploited by the market for manipulation or to 'harvest the crop'. Large institutions may take advantage of the news to inflate prices and offload their positions.
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