Interest rate cuts are something we've long anticipated, but as the time approaches, there's concern about a repeat of past tragedies: 'Will it collapse like in 2019?' Don't panic, history has provided answers. The overall faith in the market still exists, and I firmly believe that the future is bright. So, let's just do it; whether we do or not, it will be over...
First, let's look at two 'reverse level' cases:
🔹2019: The market speculated heavily on the positive news, with BTC rising from 3000 to 12000, but when the interest rate cut news hit, it plummeted by 38% in a single day, leaving those who bought high stranded mid-way. The core reason: the good news was over-leveraged, and when institutions ran, it caused a stampede.
🔹2024: Everyone feared a repeat of 2019 and reduced their positions early, but three significant positive factors emerged—Trump's endorsement, ETF buying spree, and Tesla and Microsoft increasing their holdings—leading BTC to soar from 80000 to 104000 instead. The key here is: the market did not digest the variables in advance, and the interest rate cut became a 'catalyst.'
So how do you view 2025? The core lies in the range before the interest rate cuts:
👉 If it breaks through 115,000 beforehand: be cautious, as it indicates that the good news has been overextended, and a significant drop similar to 2019 is likely.
👉 If it stays around 100,000–105,000, combined with a 50 basis point rate cut: it’s actually healthy, indicating that expectations have not been fully priced in, and once the rate cut is realized, funds will start pouring in, targeting 115,000.
In practice, don’t rush to go all in; wait to see a breakout at 105,000 before considering adding positions. Also, be sure to pay attention to Powell's wording — if it suggests 'further easing ahead', that would be the strongest catalyst.
But just watching the direction is not enough; risk management is the real skill.
Many people are afraid of being 'crushed' while holding spot positions; here you can use put options for protection. Simply put, buying put options is like insuring your spot holdings:
If BTC crashes, for example, from 105,000 to 90,000, the spot incurs losses, but the price of put options soars, just offsetting part of the loss;
If BTC does not fall and even rises, you may only lose a premium on the put options, keeping costs manageable while still profiting from the spot.
The core of this strategy is to turn uncertainty into 'certain insurance premiums' to avoid a repeat of the disastrous plunge from 2019.
Final reminder: The September market is just a warm-up. Whether it can break through 120,000 by the end of the year depends on three major variables:
1️⃣ October CPI — If the data continues to decline, the Federal Reserve will have more room for easing later;
2️⃣ Institutional Holdings — If large holders like Tesla and Grayscale continue to increase their positions, confidence remains;
3️⃣ Middle East situation — If geopolitical risks ease, safe-haven funds will not exit on a large scale.
Remember, the market is a game of capital and expectations. Only by keeping a close eye on signals and implementing risk control can you both gain and avoid being buried in this 'interest rate cut game'.
Appendix: 📌 A practical guide to using put options to protect spot holdings.
If you hold BTC spot for a long time but are worried about significant fluctuations before and after the Federal Reserve's interest rate cuts, you can hedge the risk by buying protective put options. The operation is quite simple:
1️⃣ Determine the protection period
If you are concerned about the risk fluctuations before and after the September interest rate cut, you can buy options with an expiration time of 1–2 months to cover the most critical risk window.
If you plan to hold spot for a long time but are afraid of a big drop in the market by the end of the year, consider buying medium- to long-term put options with an expiration of 3–6 months as long-term insurance.
2️⃣ Choose the strike price
Generally, choose a strike price that is 5–10% below the spot price.
For example, if BTC is currently at 105,000 USD, you can choose put options at 95,000 or 100,000. This way, it won't be too expensive and can provide effective protection in case of a market crash.
If you are very worried about extreme market conditions, you can buy at-the-money (ATM) options, which provide stronger protection but at a higher cost.
3️⃣ Control costs
Options are like insurance premiums; spending too much will erode profits. It is generally recommended to use 5–10% of your position to buy options insurance, but do not invest all your capital.
If you think the option premiums are too expensive, you can also use the 'collar strategy': simultaneously sell a put option with a lower strike price to offset costs, effectively creating 'low-risk + low-cost'.
4️⃣ Practical results
If BTC crashes, for example, from 105,000 to 90,000, the spot will incur losses, but the options will soar, hedging part of the loss.
If BTC does not decline and instead rises, you may only lose a premium, but the spot still makes money, effectively paying a small 'insurance premium'.
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📊 The benefits of doing this are:
Psychologically more stable: you don't have to fear being stuck by a sudden drop.
Unlimited profit potential: If BTC breaks upwards, the options are just a small cost, and the spot can enjoy the entire upside.
With risk control in place: even if you encounter a crash like in 2019, you won't be buried immediately.
This is the profit and loss chart for the BTC Protective Put strategy:
Gray dashed line: Current spot price (105,000).
Blue dashed line: The profit and loss curve of holding only spot; the more the price falls, the greater the loss.
Orange solid line: The combined strategy of spot + put options limits the extent of losses when prices plummet, effectively insuring the spot.
Does not constitute any investment advice, for learning and exchange purposes only!$BTC
