Powell's speech tonight released three key signals, a deep interpretation below:
1. Dollar emergency packages distributed globally
The liquidity alert for Bitcoin has been lifted. Powell made it clear: once there is a global dollar shortage, the Federal Reserve will directly provide funds to central banks of various countries. This is equivalent to giving the market a shot of reassurance, similar to the restart of the dollar swap agreements during the pandemic in 2020, directly alleviating the liquidity crisis. Powell is essentially equipping the global market with an airbag, reducing the risk of panic selling. When central banks keep printing money, the constant total supply of Bitcoin serves as a safe deposit.
2. Stablecoins receive official endorsement
The mainstreaming of cryptocurrencies has taken a crucial step, as Powell acknowledged for the first time that stablecoins are a form of currency and supports the establishment of a legal framework. This is akin to the official issuing of temporary IDs for stablecoins like USDT and USDC, with two significant implications behind it:
1. Regulatory incorporation, bringing stablecoins into the traditional financial system through compliance frameworks to prevent them from going out of control;
2. Possibly paving the way for a digital dollar, first allowing private stablecoins to test the waters, so that when the Federal Reserve introduces a CBDC (Central Bank Digital Currency) in the future, it can directly take over this infrastructure, realizing the scenario of state-owned enterprises incorporating private enterprises.
Regardless, the legalization of stablecoins will accelerate the flow of funds in and out of the cryptocurrency market, attracting more traditional capital to enter.
3. Bank regulation loosens, institutional funds have opened the floodgates
Powell made it clear that he will not prevent banks from serving crypto clients as long as they manage risks properly. This is equivalent to giving Wall Street the green light, directly benefiting institutions, allowing banks to legally custody Bitcoin and provide trading and settlement services, lowering the entry threshold for institutions. This promotes BTC from being a retail battlefield to an institutional asset pool. However, regulatory loosening does not mean unrestrained freedom. Powell specifically mentioned the need to learn from the lessons of the Silicon Valley Bank collapse, and in the future may require banks to isolate the risks of crypto businesses to avoid systemic crises.
The policy bottom for Bitcoin has emerged, but the game has just begun. Powell's three consecutive announcements released clear signals that the Federal Reserve is shifting from being opponents of cryptocurrencies to risk managers. For the market, the alleviation of liquidity panic + the decrease in regulatory uncertainty means that Bitcoin is welcoming a short-term emotional recovery. Operational advice: Hold onto spot positions tightly, focus on the progress of bank cooperation and the legislative timetable for stablecoins; these two indicators will determine the height of the second wave of the bull market!