Recently, U.S. economic data has collectively disappointed, with non-farm employment, consumption, and manufacturing all showing weakness, making a Fed rate cut a certainty. This is definitely a major positive for the cryptocurrency market!
One, the U.S. economy is showing warning signs:
In July, new jobs increased by only 73,000 (far lower than the expected 110,000), and the data for May and June was revised down by 258,000, marking the largest revision in five years. The unemployment rate rose to 4.2%, making it harder for young people to find jobs. Retail sales increased by 0.5%, but only 0.2% when excluding auto and gasoline sales, indicating tight finances for the public. Consumer confidence fell to 58.6 (the lowest this year), while inflation expectations soared to 4.9%, making money feel less valuable and causing people to hesitate in spending. The manufacturing index dropped to 48 (below the neutral line of 50), leading businesses to hesitate in investment and production contraction.
Two, the Federal Reserve makes a sharp turn, likely cutting rates in September:
On August 22, Powell stated: employment risks have increased, inflation is temporarily set aside, and the Fed will flexibly adjust policies. The market reacted immediately: the probability of a rate cut in September surged from 40% to 91%, with the possibility of three cuts this year! The dollar index fell by 1% that day, while gold and U.S. stocks all rose as capital preemptively bet on easing.
Three, why is a rate cut good for Bitcoin?
When the dollar depreciates, capital flows into high-risk assets like Bitcoin, and historical patterns support this. Now, with the dollar's credibility being undermined, Bitcoin's 'anti-depreciation' advantage is even more pronounced. The traditional market (like U.S. stocks) relies heavily on AI support, and large funds need to find high-yield places; the cryptocurrency market, with its 24-hour trading and high volatility, perfectly attracts hot money. When U.S. Treasury bonds fall and gold rises, it indicates the start of 'recession trading', and those who hoard Bitcoin after the rate cut will profit.
Four, how to operate now? Don't get left behind:
In August, the cryptocurrency market was stagnant, mainly due to the turnover of old and new funds (ETF buying hedging early sell-offs) + Ethereum staking release (3.1 billion USD waiting to be released), but the overall trend has changed, don't panic. Recommendation: Hold Bitcoin and Ethereum (direct beneficiaries of ETFs), and also allocate some funds to highly elastic cryptocurrencies like AI and Depin, keeping 30% cash to chase increases after interest rate cuts.
With poor U.S. economic data, the Fed is set to cut rates, presenting a rare opportunity for the cryptocurrency market. Bitcoin, as 'digital gold', is worth more during dollar depreciation and high inflation. Don't panic at short-term volatility; hold onto mainstream coins, position in high-elasticity sectors, and wait for an explosion after the rate cut.
When to enter, when to exit? How to catch strong coins? How much to set for profit-taking? The Thirteenth Aunt will notify fans immediately on Luxury Skirt; just follow my thinking and execute what I say, and you will surely benefit!
