This morning I saw a significant trend in the news — the Fed will be replacing several key positions next year, and the new appointees tend to have a conservative stance.

First, let's clarify the concept: the so-called "hawks" refer to those officials within the Fed who are highly vigilant about inflation and are reluctant to cut interest rates. Their dominance usually means that high interest rates will be maintained for a longer period, increasing the probability of tighter monetary policy. This is equivalent to the funding faucet being tightened for the crypto market, which requires ample liquidity.

Specifically, next year the presidents of the four regions, including Boston and St. Louis, will rotate. Current Boston president Collins, although she voted in favor of a rate cut last time, has since made it clear that "the threshold for further rate cuts will be very high"; St. Louis's Musalem is more cautious, repeatedly emphasizing that there is not much room for rate cuts.

It is worth noting that several newly granted voting members next year, such as the chairs from Philadelphia and Minneapolis, generally belong to the more hawkish camp. For instance, Minneapolis's Kashkari has repeatedly mentioned that "the economic fundamentals can still hold up, there is no need to rush to ease policies." With this group coming together for meetings, it can be anticipated that the Fed will likely maintain a "wait-and-see + cautious" posture next year, and the pace of interest rate cuts may be slower and smaller than the market expects.

The impact on the cryptocurrency market is direct. In a high-interest rate environment, traditional capital tends to stay in low-risk areas, and the incremental funds flowing into digital assets like Bitcoin and Ethereum will decrease. Market volatility may be amplified in the short term.