Yesterday, the Federal Reserve completed its first rate cut of the year as expected, with a reduction of 25 basis points bringing the federal funds rate range down to 4%-4.25%. As the results have been fully digested by the market, there was no significant volatility, and the focus shifted to Powell's statements and internal policy disagreements within the Fed. Powell emphasized two core points: first, inflation is under control, and the policy focus is shifting to the labor market; second, it is abandoning a continuous large-scale rate cut in favor of a "step-by-step" cautious strategy, dispelling the illusion that a "large easing cycle is about to begin." There are notable internal disagreements within the Fed: among the 19 officials, some believe there is no need for further rate cuts this year, some advocate for at most one more cut, 9 support a total of three cuts over the year, and 1 suggests a cut of 150 basis points, reflecting differing judgments on the economic outlook. At the same time, the Fed raised its economic growth expectations for the coming years, showing increased confidence in a "soft landing" for the economy.

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In terms of impact on the cryptocurrency market, it is difficult to be optimistic in the short term: the 25 basis points rate cut has already been reflected in the cryptocurrency prices, making a significant surge unlikely; moreover, Powell emphasized that this rate cut is not the beginning of a "big release of funds," and the possibility of continuous large rate cuts is low, leading to a lack of strong capital support in the cryptocurrency market in the short term. In the long term, a shift to a more accommodative policy is still favorable for the cryptocurrency market as a risk asset. The current rate cut is a "warming up" of the easing cycle; if the job market weakens or the economy comes under pressure, after the Federal Reserve initiates a comprehensive easing, the increase in liquidity will inject continuous momentum into the cryptocurrency market, forming medium to long-term support. It should be clear that a single rate cut does not equal the arrival of a bull market. In the short term, the cryptocurrency market is likely to experience volatility, with capital expectations and market sentiment being the core influencing factors on prices. For investors, there is no need to be overly excited or blindly chase highs in the short term; long-term holders can remain steadfast, and those who keep their composure may ultimately benefit.

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