🎉 Hey Gate Square friends! Non-stop perks and endless excitement—our hottest posting reward events are ongoing now! The more you post, the more you win. Don’t miss your exclusive goodies! 🚀
🆘 #Gate 2025 Semi-Year Community Gala# | Square Content Creator TOP 10
Only 1 day left! Your favorite creator is one vote away from TOP 10. Interact on Square to earn Votes—boost them and enter the prize draw. Prizes: iPhone 16 Pro Max, Golden Bull sculpture, Futures Vouchers!
Details 👉 https://www.gate.com/activities/community-vote
1️⃣ #Show My Alpha Points# | Share your Alpha points & gains
Post your
Recently, the focus of the financial market has been on two important events of the Federal Reserve: the release of the minutes from the July FOMC monetary policy meeting and the speech by Federal Reserve Chairman Powell at the Jackson Hole Global Central Bank Annual Meeting. These two events have had a significant impact on market expectations, particularly regarding the timing and extent of potential interest rate cuts by the Federal Reserve.
Currently, the market generally expects the Federal Reserve to cut interest rates by 25 basis points in September. However, the latest economic data, particularly the higher-than-expected Producer Price Index (PPI), suggests that inflation remains stubborn, raising concerns among investors that the rate cut may be delayed or the magnitude reduced.
This expected change directly affects the cryptocurrency market. The price of Bitcoin has shown a significant pullback, falling more than 3% and briefly dropping below $29,000. At the same time, Ethereum (ETH) experienced an even larger decline, exceeding 5%. The total market capitalization of the entire cryptocurrency market has shrunk by approximately $107 billion.
The Federal Reserve's monetary policy influences Bitcoin prices through various channels:
1. Market liquidity expectations: Interest rate cuts or expectations of rate cuts often imply that market liquidity may increase, and some funds may flow into assets such as Bitcoin in search of higher returns.
2. Interest Rate Environment and Asset Attractiveness: In a high interest rate environment, the attractiveness of traditional interest-bearing assets increases, which may weaken the demand for non-interest-bearing assets such as Bitcoin.
3. Exchange rate of the US dollar: The Federal Reserve's policy stance directly affects the strength of the US dollar, and Bitcoin is often seen as one of the tools to hedge against the devaluation of the dollar and inflation.
4. Market Risk Appetite: Bitcoin is still considered a high-risk asset by many investors. The uncertainty of the economic outlook may lead to a decline in risk appetite, causing funds to flow out of assets like Bitcoin.
Currently, the Federal Reserve's potential delay in interest rate cuts or reduction in the magnitude of cuts due to persistent inflation poses short-term pressure on Bitcoin. This is primarily achieved by suppressing market risk appetite and enhancing the attractiveness of the dollar.
In this complex market environment, investors need to closely monitor the Federal Reserve's policy signals and economic data to better grasp the trends in the cryptocurrency market. At the same time, it is important to recognize the high volatility characteristics of the cryptocurrency market and to implement effective risk management.