The Federal Reserve is about to announce its interest rate cut decision, which could have a profound impact on the Crypto Assets market. The market generally expects a 25 basis point cut, but investors are more focused on Fed Chairman Powell's statements regarding the future path of interest rate cuts, which is likely to be a key factor in determining the market's direction.

To better understand the potential impact of this interest rate cut, we can review several historical cases:

In 2020, in the face of the sudden pandemic, the Fed took aggressive monetary policy measures, rapidly lowering interest rates and initiating a large-scale asset purchase program. This move did indeed stimulate a market rebound, but it also triggered inflationary pressures, leading to a sharp rise in digital assets such as Bitcoin.

In the early stages of the 2007 subprime mortgage crisis, the Fed attempted to save the already high asset prices by cutting interest rates, but ultimately failed to prevent the market collapse.

In 2001, under the dual impact of the internet bubble burst and the 911 incident, the Fed's interest rate cuts came a bit late and failed to effectively curb the decline of technology stocks.

In 1995, under a favorable economic situation, the Fed's "preventive rate cut" unexpectedly drove the continuous rise of the stock market.

Currently, although there are no obvious signs of economic recession, the US stock market, bond market, and Crypto Assets market are all at historical highs. The market seems to have already priced in the expectation of the Fed "easing". If Powell's statements fall short of market expectations, asset prices may experience significant volatility. Therefore, investors need to maintain a cautiously optimistic attitude while closely following two major potential risks:

1. Inflation rebound: If the inflation rate rises again, the Fed may be forced to tighten monetary policy, which will impact the market.

2. The economy falls into "stagflation": If the economy does not recover after interest rate cuts, while prices remain high, both the stock market and the Crypto Assets market will face pressure.

In terms of the crypto assets market:

Bitcoin: Despite the US stock market reaching new highs, the increase in Bitcoin has been relatively lagging, which may indicate that demand is nearing saturation. If the Fed does not further "loosen" (such as continuing to cut interest rates), Bitcoin may experience a phase decline.

Other Crypto Assets: While some Crypto Assets may still have 5-10 times the upside potential, this opportunity is unlikely to occur with older coins that have been around for many years. These older coins often face issues of chip dispersion and a large number of trapped positions, making it difficult to replicate significant price increases.

Overall, interest rate cuts can be seen as a "catalyst" for market trends, but they are by no means a "magic key". While investors seize market opportunities, they must also clarify their exit strategies to avoid falling into difficulties due to excessive greed. In this uncertain market environment, maintaining rationality and vigilance is crucial.