The Federal Reserve cut interest rates three times

The U.S. Federal Reserve recently announced the results of its latest monetary policy meeting, announcing that it would keep interest rates unchanged. A statement issued after the meeting pointed out that it is expected that there will be three interest rate cuts this year, but that interest rate cuts will not be initiated until there is more confidence in inflation. Such results are basically consistent with expectations, and the market has clearer expectations for the future direction of the Fed's monetary policy.

The Federal Reserve raised its forecast for U.S. economic growth this year to 2.1%, up from the 1.4% forecast in December. At the same time, it also raised its core inflation forecast for this year to 2.6%, reflecting that the policy preference is still hawkish. The interest rate dot plot shows that the federal funds rate is expected to fall to 4.6% by the end of this year and further to 3.9% by the end of next year. This means that the Federal Reserve is likely to cut interest rates by 0.25 percentage points at the next two interest rate meetings.

While the Federal Reserve maintains a hawkish stance, expectations of a rate cut keep stocks bullish. U.S. stocks rebounded after the results of the Federal Reserve's interest rate meeting were announced, with all three major stock indexes closing higher. In the longer term, the Federal Reserve's interest rate cuts will further ease the U.S. monetary environment, which will be beneficial to the rise of stock markets and cryptocurrency prices.

In addition to directly stimulating U.S. stocks, the Federal Reserve's interest rate cuts will also push up cryptocurrency prices. As the Reserve Bank of China continues to cut interest rates and there is excess liquidity in the U.S. dollar, investors will look for alternative allocation methods. As an emerging asset, cryptocurrencies are expected to attract more capital inflows. In fact, since the Federal Reserve began to hint that interest rates may be cut this year, the prices of mainstream cryptocurrencies such as Bitcoin have clearly benefited and are showing an upward trend.

Rate cuts will boost global stock markets and cryptocurrency prices

The stimulating effect of the Federal Reserve's interest rate cuts on the stock market and cryptocurrency is also reflected in historical trends. After the Federal Reserve began its interest rate cut cycle in 2015, the U.S. Bulletin Board Index surged from around 1,800 points at the beginning of that year to over 3,200 points now. During the same period, the price of Bitcoin also surged from around US$200 in 2015 to a high of US$20,000 last year.

Of course, the Fed's modest interest rate cuts also limit the intensity of stimulus. Currently, the Federal Reserve only expects to cut interest rates by 0.75 percentage points this year, which is far lower than the total rate cut of 1 percentage point in 2015. Coupled with uncertainties such as trade frictions, there are still variables in the market outlook for U.S. stocks and cryptocurrencies. But overall, the expectation of a Federal Reserve interest rate cut will bring positive support to U.S. stocks and cryptocurrency prices.

As global economic growth slows down, central banks around the world have adopted easing policies. The European Central Bank has already introduced negative interest rates, and the Bank of England has also hinted that it may cut interest rates. In an environment where central banks around the world are easing, the Fed's interest rate cuts will further push up global stock markets and cryptocurrency prices. For investors, they may wish to pay attention to the future policy direction of the Federal Reserve and promptly adjust the allocation of risky assets such as stocks and cryptocurrencies.

There are several major tracks that may be about to break out in the bull market

1. The potential of ETH Layer2 Layer2 technology is gradually emerging. Solana is actively promoting ecological development. Layer2 projects may become Solana’s competitors in the future.

Key projects in the Layer2 field: Starknet, zkSync, Blast

2. The modular public chain AERGO coin is a digital asset based on blockchain technology and aims to provide efficient blockchain solutions for enterprises. AERGO's goal is to provide enterprises and developers with a simple, secure, and efficient blockchain platform to build and manage decentralized applications (DApps). The project is promoted by the AERGO Foundation and aims to provide scalable, flexible and easy-to-use blockchain solutions.

Focused projects in the modular public chain field: Aergo, Altlayer, Avail, Fuel

3. BTC Ecology As the understanding of the liquidity value of Bitcoin gradually increases, BTCfi is expected to host a market of more than 100 billion US dollars.

Projects of concern in the BTC ecosystem: Stacks, Merlin, B² Network

4. The proposal of RestakingRestaking helps emerging blockchain projects obtain appropriate security during the startup phase and avoid excessive token inflation.

Projects to follow: Eigenlayer, Renzo, Puffer, Pendle

5. GameFiGHST is a token launched through DAICO and managed by DAO, which means community management of funds raised. GHST is a DeFi-enabled crypto collectibles project that allows users to collect, compete, and combine their Aavegotchis, providing a gamified DeFi experience.

Projects of interest in the GameFi field: GHST, Space Nation, Matr1x

6. The iteration of AI+Web3AI will inject new vitality into the cryptocurrency field, and blockchain technology provides transparent and verifiable solutions for AI.

Projects of interest in the AI+Web3 field: TAO, OLAS

7. Depin concept: Depin is a new online + offline token distribution and service provision model. With the continuous improvement of infrastructure, its exponential network growth will usher in a new phenomenon.

Focus projects in the Depin field: Mobile, Io.net

8. The DeFi derivatives financial scenario has always been the most suitable application area for blockchain with high value and actual benefits. GHST coin is a cryptocurrency based on the Ethereum blockchain launched by the Aavegotchi team. Aavegotchi is an NFT-based decentralized application designed to combine traditional collectibles with blockchain technology. As the native token of the Aavegotchi ecosystem, GHST currency has a variety of uses, such as purchasing and customizing Aavegotchi NFTs, participating in governance decisions, etc.

Projects of interest in the DeFi field: GHST, GMX, Gains, Drift, Apex, Aevo

In short, stimulated by the Federal Reserve's interest rate reduction policy, the cryptocurrency market has ushered in new opportunities. Investors can pay attention to the above tracks, seize investment opportunities in the cryptocurrency market, and achieve asset appreciation. At the same time, investors also need to pay attention to market dynamics, invest rationally, and avoid blindly following the trend.

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