Many people think that once the Fed cuts interest rates, the crypto market will skyrocket. But in reality? It’s much more complicated than that.

Take last September’s 0.25% rate cut—by the time it actually happened, the market had already priced it in. When it was finally implemented, digital asset inflows were only $977 million. Not only did Bitcoin not surge, it actually entered a period of volatility. But in December—when rate cut expectations surged above 80%—Bitcoin shot up over 10%, jumping from $84,000 back above $93,000. Ethereum followed suit, climbing from $2,800 to $3,200.

What does this tell us? Expectations matter more than actual moves.

But here’s a fact: money has preferences. Major coins like Bitcoin and Ethereum will always be the first choice for capital. Nearly all the incremental funds from rate cuts pile into these. As for altcoins with no fundamentals? Even in an easing cycle, they’re just left with scraps—their gains can’t compare at all.

What’s even riskier is that any positive momentum can be wiped out by other factors. If there’s disagreement within the Fed about the pace, or if some region suddenly tightens regulations, the crypto market can easily ignore a rate cut. Just like at the end of last year: while rate cut expectations were rising, regulations were also tightening, causing Bitcoin to plunge nearly 8% in a single day. Recovery only came later, thanks to renewed easing expectations.

So yes, rate cuts do inject liquidity into the market and raise risk appetite. But if you think you can just sit back and win off this alone? It’s not that simple. You need to watch the pace of expectations, the quality of assets, and the external environment—none of these can be ignored.