How to Increase the Success Rate of Cryptocurrency Speculation

###It is highly unlikely that a rate cut in September will be realized first.

Recently, there has been lively discussion in the cryptocurrency market about whether the Federal Reserve ( FRB ) will lower interest rates in September. Some argue that "a rate cut is definitely coming" in light of ETH hitting new highs, while others are concerned about BTC fees and believe "a rate cut is difficult." However, it is highly unlikely that a rate cut will occur in September. Let me outline the reasons.

###Insufficient Grounds for Rate Cuts

When the FRB decides to cut interest rates, it carefully examines economic indicators. Currently, the key indicators suggest that "a rate cut is premature." The unemployment rate stands at 4.2%, which is historically low and an astonishing figure compared to 14.7% during the pandemic in 2020. Employment is now stable, consumption is strong, and there are no large-scale layoffs by companies, so the necessity for the FRB to implement a "rate cut to stabilize employment" is low.

In addition, the core PCE inflation rate, which the FRB places importance on, is at 3.1%, still far from the 2% target. A rate cut at this stage would be akin to "pouring fuel on inflation," and the increase in market funds due to lower interest rates, coupled with the impact of trade tariffs, could raise the likelihood that companies will pass on cost increases to consumers.

###Concerns About a Bubble in the Stock Market

Currently, the Dow Jones Industrial Average and the NASDAQ index are at high levels, showing signs of a bubble. A rate cut at this timing could lead to further inflow of funds into the stock market, potentially inflating the bubble even more. Considering the lessons from the excessive monetary easing before the 2008 financial crisis, it is unlikely that the Fed will take such risks.

###Response to Debt Issues

The massive debt issue cannot be fundamentally resolved by simply lowering interest rates. If interest rates are reduced excessively, there is a risk of losing the credibility of the US dollar. Rather, it is more likely that alternative approaches, such as tariff measures, will be implemented to address the situation.

###Impact on the Cryptocurrency Market

Considering these factors, if the Federal Reserve decides to refrain from cutting interest rates in September, the stock market may decline, and in conjunction, the cryptocurrency market may also enter a correction phase. BTC could drop below $40,000, and ETH might fall below $4,200. Subsequently, around October, if the Federal Reserve hints at the "possibility of an interest rate cut in November," the market may temporarily overheat, but this could also potentially be a strategy to attract speculative money. Impact forecast of FRB's decision to postpone interest rate cuts on the cryptocurrency market

###Advice for Cryptocurrency Investors

In such a situation, it is wise to refrain from new investments in September and closely monitor market trends. It is recommended to reduce the holding ratio of altcoins by about 30-50% to mitigate risks. The results of the Federal Reserve meeting in September will be a crucial point that influences the market for the next three months, and if a clear policy of "deferring interest rate cuts for the time being" is indicated, it would be prudent to consider adjusting positions. One should not be swayed by ambiguous expressions and must maintain a calm judgment.

The cryptocurrency market is greatly influenced by the trends of the Federal Reserve. It is important not to be swayed by short-term market fluctuations, but rather to discern the underlying logic. The rate cut in September is likely to end in an "illusion," and may instead mark the "beginning of a correction." It is wise to prepare for a "decline" rather than to "expect an increase" at this time, and I recommend calmly waiting for opportunities after October.