Good morning, traders and investors!

Early this morning, the Federal Reserve cut interest rates. Many of you probably stayed up watching the markets, right? This development has quite an interesting impact on our crypto circle. Here’s a share from Liang Ge: the core message is one sentence—central banks gave us a piece of candy but told us in advance that we might have to endure some bitter medicine afterward.

First, what is the candy? It’s two solid “gifts”:

1. Rate cut: Interest rates lowered, with the target range reduced by 25 basis points to between 3.5% and 3.75%. Everyone expected this; it’s routine.
2. Direct money printing: This is a bit beyond expectations! The Federal Reserve announced that starting this month, they will buy $40 billion worth of government bonds each month. This is equivalent to directly injecting money into the financial system, so the market won’t lack funds in the short term. As you see, once the news came out, both the US stock market and Bitcoin bounced a bit—that’s the “candy water” boost from this stimulus.

So, what is the bitter medicine?
After enjoying the show, you need to carefully listen to the “hidden tone” of the Fed. The latest December dot plot shows that their plan for 2026 is almost to not cut rates much at all for nearly a whole year. What does this mean? It’s telling you: brothers, we’re giving you some short-term sweetness, but don’t expect rates to fall sharply over the next two years—borrowing costs will still be relatively high, and this tightening grip will last a long time.
And that “money printing” plan— they explicitly said it’s not like the massive liquidity flood of 2008, just a temporary technical operation to address the “tight money” situation among banks. It will stop sometime next year.

So, what does this mean for us crypto players? How should we view and act?

1. Short-term (next few weeks): Don’t get too overexcited. You can follow the “candy,” but be quick.

· Market sentiment improves: Short-term liquidity is sufficient, and the overall risk market atmosphere will warm up. Bitcoin and mainstream coins are likely to rebound together.
· But beware of “good news is exhausted”: Since the rate cut was expected and the candy is already in your mouth, the rebound might just be a fleeting emotional spike, not a long-term trend reversal. If Bitcoin can’t even hold above $90,000, it shows the bullish strength isn’t firm.
· Operation tips: If you already have positions, this rebound is a good chance to optimize your holdings and take profits on some. If you’re flat and want to chase, remember to keep your positions small and act quickly—treat it as a short-term emotional trade, not as the beginning of a big bull market to go all-in.

2. Mid- to long-term (next few months to a year or two): Be patient, lower expectations.

· The “high interest rate” pill will be digested slowly: eventually, the market will realize that the era of cheap money won’t return so quickly. This will suppress the upward potential of all risk assets (including stocks and cryptocurrencies). Future rallies may not be as crazy and could be more volatile.
· Crypto narratives will diversify: a broad bull market may be difficult; funds will be more selective. Assets like Bitcoin, backed by “digital gold” and ETF support, may be more resilient and favored. Many small coins that rely solely on liquidity hype will face significant pressure down the line.
· Operation tips: Slow down your investment pace. Don’t expect to achieve overnight success.
Focus on dollar-cost averaging into core assets like Bitcoin and Ethereum, using market fluctuations and pullbacks to buy gradually. As for altcoins, only consider them when the trend is very clear, and always keep your positions light.

To sum up:
This move by the Fed is essentially a “slap in the face combined with a sweet treat.” The short-term sugar (money printing) will excite the market temporarily, and we can take advantage of this. But the slap (long-term high interest rates) is already raised—it just hasn’t fallen yet.

Therefore, our strategy should be “sharp and nuanced”:

Be optimistic in the short term, ride the wave;

But keep a steady mindset in the medium to long term, preparing for a more complicated environment where money is “more expensive.”

Don’t get blinded by the temporary rise. Always remember, that “medicine” is still waiting behind. Stay calm, preserve your capital, and once the trend becomes clearer, it’s not too late to increase your efforts.