The benefits of the U.S. interest rate cut for the cryptocurrency market such as Bitcoin are multifaceted:

Increased Investment Attraction

The Federal Reserve's rate cut will lower the yields on dollar assets. To pursue higher-yielding assets, investors may turn their attention to cryptocurrencies, thereby increasing investment demand in the crypto market and driving up prices.

Highlighted Safe-Haven Attributes

Cryptocurrencies like Bitcoin are often seen as safe-haven assets against economic uncertainty. Rate cuts are typically viewed as signals of potential economic downturns. In this context, to hedge against potential economic or market risks, investors may allocate some of their assets to cryptocurrencies.

Increased Market Liquidity

A rate cut will lead to increased liquidity in global markets, and some funds may flow into the cryptocurrency market, enhancing trading activity, market liquidity, and trading volume for cryptocurrencies. However, this may also exacerbate market volatility.

Friendly Regulatory Environment

After taking office, the administration has committed to creating a friendly regulatory environment for cryptocurrencies, appointing relevant personnel to promote the development of the crypto industry. This is a policy benefit for cryptocurrencies like Bitcoin, boosting market confidence and expectations.

Increased Demand for Cross-Border Transactions

The exchange rate fluctuations triggered by rate cuts may lead investors to use cryptocurrencies for cross-border transactions to evade capital controls. The increase in cross-border capital flows will have a positive impact on the liquidity and trading activities in the cryptocurrency market! #美联储降息