Breaking news early in the morning: The Federal Reserve injected $16 billion into the banking system through overnight repurchase agreements, marking the second-largest liquidity operation since the COVID-19 pandemic outbreak.

Market reactions were swift. Some called it a signal to rescue the market, while others warned of an impending storm. But the key question is—where will this money actually flow?

**What history tells us**

Looking back over the past decade, every large-scale liquidity injection has been followed by movements in risk assets. Especially for highly volatile assets like Bitcoin, which often become safe havens or appreciation options for funds. But the environment has changed now. Amid high inflation and high interest rates, the Fed is tightening while also injecting liquidity—what is the true intention behind these seemingly contradictory actions?

Is it short-term stabilization? Or a subtle shift in policy direction? The market is waiting for a clear signal.

**Opportunities and traps in the crypto world**

Increased liquidity can easily boost valuations of risk assets. Mainstream cryptocurrencies like Bitcoin and Ethereum may benefit. But this time, be especially cautious—interest rate pressure remains, and market sentiment can fluctuate easily. The reasons for optimism yesterday could be completely overturned today.

Simply put: liquidity is a sugar-coated cannonball, but the direction of the bullets is uncertain.

**The truth behind policy game-playing**

The Fed’s contradictory actions actually hint at deep-seated anxiety. Warnings of weakening economic data have already appeared, and interbank liquidity is tight in reality. This injection seems more like a "stop the bleeding" move rather than a "massive liquidity flood."

In other words, market volatility is likely to increase. Investors need to beware of "expectation bias"—a policy shift could cause earlier optimistic expectations to collapse.

**Your choices**

The liquidity wave has already begun. Is it time to ride the wave or stay on the sidelines? In this game between the Fed and the market, what is your judgment? Bullish or bearish?