If the Federal Reserve cuts interest rates by more than 100 basis points this year, meaning at least four rate cuts, is this ultimately good or bad for the crypto market?

To be honest: large-scale rate cuts are not inherently a good signal. Currently, the federal funds rate is stuck in the 3.5%-3.75% range. According to market expectations and the Fed's own dot plot, at most 1-2 rate cuts are expected by 2026, totaling up to 50bp. A sudden move of over 100bp indicates a problem—something's wrong with the US economy, employment data has collapsed, growth has significantly slowed or even shows signs of recession, and the Fed is forced to flood the market with liquidity.

Traditional stock markets and real estate certainly can't handle this, and risk assets will inevitably be hammered in the short term. But turn the lens to Bitcoin and mainstream cryptocurrencies, and the situation is completely reversed.

There are three fundamental reasons. First, a flood of liquidity is pouring in. Historically, every large-scale rate cut has validated this logic—cut interest rates, and money has nowhere to go in the market. High-yield opportunities shut down, and funds can only flock into risk assets. During the pandemic in 2020, the Fed slashed rates to zero, and Bitcoin soared from $3,000 to $60,000—this is a textbook example of this logic.

Second, Bitcoin's safe-haven attributes are amplified. The more uncertain the economy, the more investors need to hedge against inflation and fiat currency devaluation. Rate-cut cycles are often followed by a weakening dollar and soaring gold prices. As a scarcer asset, Bitcoin's attractiveness skyrockets, drawing both institutions and retail investors.

Third, a low-interest-rate environment directly eliminates the opportunity cost of holding cash. Money in the bank yields nothing, so why not go all-in on high-growth assets?

If a rate cut of over 100bp really happens in 2026, my judgment is that this will become the last frenzy of this cycle.