What does it mean that the two-year government bond yield is lower than the ten-year?
This is called **"yield inversion", which is usually a precursor to economic recession**. In the past few decades, after each inversion, either interest rates were cut immediately, or the economy began to weaken.
The Treasury Secretary directly stated: "The Federal Reserve needs to consider cutting interest rates", which is actually signaling an expectation in advance, telling the market: "Prepare for a return of liquidity".
Direct impact on the cryptocurrency market:
1️⃣ Increased expectation of interest rate cuts = Positive for the crypto market
A rate cut represents a release of liquidity, making money "cheaper", allowing venture capital, institutions, and retail investors to dare to invest, with risk assets (including Bitcoin, ETH, altcoins) being the first to benefit.
2️⃣ The "anti-inflation" logic of Bitcoin is activated again
Once the market anticipates rate cuts, the pressure for the dollar to depreciate increases, and cryptocurrencies like Bitcoin will be touted as **"value reserve tools"** once more.
3️⃣ Hope for altcoin season
If the Federal Reserve actually starts cutting rates in Q3 or Q4, institutional confidence will increase, and the valuation system for altcoins will be restructured, with a new round of thematic markets expected to start.
In simple terms: The Treasury Secretary's remarks serve as a "preventive shot + stimulant" for the crypto market.
Right now: the rate cut hasn't come yet, but the market is anticipating it, and the crypto space has already started speculating on expectations.
Moving forward, keep a close eye on several key rhythms:
Whether the Federal Reserve will relent
Whether U.S. economic data continues to be revised down
Whether BTC and ETH can take the opportunity to surge and stabilize at key levels
In summary: The positive factors have already been laid out; it depends on how the market plays it out. Early positioning is the winning mindset!
