The Federal Reserve finally took action—cut interest rates by 25 basis points.

This itself isn't big news; how much liquidity does 25 basis points release? Just a drop in the bucket. But the signaling is different now. It marks a true shift in monetary policy, and the market is starting to bet on a more easing future. For cryptocurrencies, this could be a long-awaited tailwind.

**Liquidity Expectations Are Changing**

The rate cut itself isn't the key; what's important is that market expectations are shifting. Investors might think: since they've started cutting, how many more cuts are coming? Has the interest rate peak been reached? Once these expectations form, capital flows will change. The crypto market has always been sensitive to liquidity, and easing cycles are often accompanied by valuation reevaluation.

**Risk-Free Assets Are Less Attractive**

A rate decline directly reduces the attractiveness of fixed income products like government bonds. Money needs to find a new outlet, and assets with high volatility like Bitcoin and Ethereum will naturally be reconsidered. Historical data shows that during the early stages of previous easing cycles, crypto markets experienced trend reversals to the upside. Of course, whether this repeats this time depends on subsequent developments.

**Key Depends on Powell's Remarks**

The real uncertainty lies in the press conference. If Powell signals a dovish stance—implying this is just the beginning and there’s room for more rate cuts—market sentiment will remain bullish. But if he emphasizes that inflation pressures persist and that rate cuts will be cautious, it’s a different story. The "buy the rumor, sell the fact" play has never been absent in crypto circles.

**Don't Be Too Optimistic Short-Term, Long-Term Looks Promising**

The rate cut opens the door to a narrative of easing, which is positive for the crypto market in the long run. But short-term volatility is inevitable—after all, real liquidity improvements take time, and substantial new capital inflows won't happen overnight. It may still be early to call a bull market, but at least the direction is correct.