#降息 #中国 The successive interest rate cuts by the United States and China can ensure that the global financial market will usher in a turmoil.
1. Priority markets for capital flows
The interest rate cut and reserve requirement ratio cut will increase market liquidity, but these funds will not flow into the cryptocurrency market immediately. Instead, they will first flow into markets with higher liquidity and more mature markets:
Stock markets: especially those in China and the United States. As interest rate cuts reduce the attractiveness of the bond market, companies and individual investors will tend to flow funds into the stock market. A reduction in the reserve requirement ratio also means that banks have more funds to lend to companies, stimulating economic activity and pushing up the stock market.
Commodity market: Under economic stimulus policies, raw material prices tend to rise, and investors will arrange commodities such as oil and gold in advance as a tool to fight inflation.
For the cryptocurrency market, these funds will not flow in immediately because crypto assets are relatively volatile and have higher risks.
2. Capital flows in the cryptocurrency market
There may be a slight delay in the flow of funds into the cryptocurrency market, usually after the stock market and commodity markets absorb most of the liquidity, when investors begin to look for high-risk, high-return investment opportunities, and then turn their attention to cryptocurrencies. Usually this process lags by several weeks to months.
Bitcoin and Ethereum: As the two main assets in the cryptocurrency market, they may be the first to attract capital inflow. Institutional investors and venture capitalists will first invest in these relatively stable mainstream currencies.
Altcoins (other cryptocurrencies): After Bitcoin and Ethereum attracted a lot of funds, speculators and retail investors may gradually turn to other small-cap currencies.
3. Gambling of interest rate cuts
The interest rate cut may indeed be an attempt by China and the United States to attract more funds to flow into their respective stock markets. This is a typical monetary policy game, especially in the context of slowing global economic growth. Interest rate cuts help stimulate the domestic economy and attract foreign investment into the domestic market, while the liquidity of the cryptocurrency market usually lags behind and is not within the direct target of mainstream economic stimulus policies.
China's reserve requirement ratio cut: mainly to further ease the currency and increase domestic liquidity, and may hope that more funds will flow into infrastructure construction, high-tech industries and other areas supported by the state. For cryptocurrencies, although the policy does not encourage direct investment, some funds may enter through detours.
However, from the perspective of the broader global economic game, this is not only to attract funds to the domestic stock market, but also to maintain global market competitiveness. Through loose monetary policy, not only can the country's economic vitality be enhanced, but also the balance of capital flows with other economies can be maintained to avoid capital outflows. Therefore, such policies often have multiple purposes.
4. The timing of the cryptocurrency market’s benefits
It is expected that the cryptocurrency market will really begin to be affected by this interest rate cut and reserve requirement cut, which may gradually appear in the coming months, especially when funds begin to gradually shift from traditional markets to risky assets.
Phase 1: The stock market and commodity market benefit first, especially the Chinese and US stock markets, which will perform relatively positively in the short term. This phase usually lasts 1-2 months.
Phase 2: When the returns of traditional assets begin to stabilize and inflation expectations strengthen, speculative funds will gradually shift into the cryptocurrency market. Usually after 2-3 months, mainstream cryptocurrencies such as Bitcoin and Ethereum will see capital inflows.
5. The short-term impact of interest rate cuts on cryptocurrencies
The short-term impact of rate cuts could be two-sided:
Bearish scenario: Investors may withdraw from cryptocurrencies in the short term and turn to more stable stock markets, especially when liquidity is initially released, the stock market's performance is more intuitive.
Positive scenario: As more funds flow into the market, cryptocurrencies may attract a large amount of funds in a few months due to their anti-inflation properties and high return potential, especially when the stock market gradually stabilizes and speculative funds seek high-risk assets for allocation.
In summary, the interest rate cuts by China and the United States and China's reserve requirement ratio cut policy will mainly benefit the stock market and commodity market in the initial stage, while the capital inflow into the cryptocurrency market may lag for a few months, but it is still expected to become a choice for capital hedging and value-added in the medium term.
