Recently, Trump has been at odds with the Federal Reserve, shouting on social media every day for "a 100 basis point rate cut." How many opportunities does this operation hide in the crypto world? Today, we will dissect the logic behind it.
Does a rate cut equal liquidity? What Trump wants is "maximum leverage"
Why is Trump so adamant about rate cuts? Simply put, it’s "cheaper to borrow money, and more reckless gambling!"
Corporate side: Currently, the Federal Reserve's interest rates are stuck at 4.25%-4.5%, making corporate loan costs absurdly high. A 1% rate cut would directly plummet financing costs, allowing companies to dare to expand and hire. If employment data looks good, Trump can immediately brag about an "economic miracle" (May’s new job additions were only 139,000, far less than last year's average of 168,000).
Government side: The U.S. national debt has surpassed $40 trillion, with interest alone costing $150 million daily. A 1% rate cut would save the Treasury at least hundreds of billions in interest annually, money that could be used for infrastructure and welfare, ensuring stable votes?
Crypto market reflection: Under expectations of liquidity, funds will inevitably flow to high-risk assets. Hard currencies like BTC and ETH will reap the first benefits, and it is also possible for altcoins to follow suit chaotically.
The stock market must not crash! Trump’s "KPI defense battle"
The U.S. stock market is Trump’s lifeline. On June 11, the S&P 500 closed at 6022 points, just a step away from a historical high, but the market is already running out of steam—retail investors are frantically bottom-fishing, trading volume is shrinking, and valuations are inflated. If interest rates are not lowered to stimulate the market now, it could plummet from a high position at any minute.
What’s even harsher is that Trump directly threatened to replace Federal Reserve Chairman Powell (whose term ends in 2026), stating that "the new chairman must obey." This clearly aims to manipulate the independence of the central bank, and global capital is now focused on the Federal Reserve meeting on June 17. If they continue to be stubborn and do not cut rates, the market will definitely bleed profusely.
Trading advice: Contract traders take note! Must hold light positions before the Federal Reserve meeting to prevent black swan liquidations. Spot traders can ambush gold (gold surged $12 instantly after the CPI data release) and BTC (dual attributes of safe-haven + liquidity).
Tariffs + rate cuts = epic harvest?
Trump is playing a "dual strategy": imposing tariffs abroad to raise inflation (May CPI year-on-year 2.4%) while lowering interest rates domestically to depress the dollar exchange rate. This combination seems contradictory, but it actually hides deadly risks—
Dollar depreciation: The dollar index fell below 99 on June 11, capital outflows accelerated, and non-U.S. assets like BTC directly benefited.
Debt transfer: Dollar depreciation indirectly dilutes the value of U.S. Treasury bonds, forcing global holders of U.S. debt to take the hit. However, 70% of U.S. Treasury bond holders domestically will see their wealth shrink, potentially leading to social unrest.
Conflict point: Powell has long warned that "tariffs will push up inflation," and now the core CPI in May is stuck at 2.8%. A rate cut might cause inflation to take off. But Trump doesn’t care about long-term risks— with the 2025 election approaching, short-term data looking good is the way to go.
How do crypto people copy homework?
Focus on the Federal Reserve: The probability of a rate cut in September has skyrocketed; once confirmed, immediately go all in on leveraged tokens and DeFi protocols.
Hedging against black swans: The risk of U.S. Treasury bonds collapsing intensifies, allocating BTC and gold ETFs (code GLD) to hedge against systemic risks.
Ambushing policy dividends: Trump's liquidity will undoubtedly benefit the payment track and compliant platforms.
For the upcoming layout direction, I plan to help everyone find those lucrative opportunities in altcoins, expecting returns to multiply by ten times is not a problem. Like and comment, and I will take you to layout the entire bull market!
