A new round of interest rate cuts is coming, and encryption assets are welcoming favourable information, with the Ethereum Spot ETF expected to be launched.

1. The Federal Reserve takes a cautious wait-and-see approach, and a trend of global interest rate cuts is gradually emerging.

Recently, the Federal Reserve maintained the target range for the federal funds rate at 5.25% to 5.50% and plans to slow down the balance sheet reduction starting in June. The market expects the probability of a rate cut in September to be close to 50%, and a rate cut before the end of the year is almost a foregone conclusion.

Federal Reserve Governor Christopher Waller stated that in the case of a robust labor market, it will take 3-5 months of good inflation data before considering a rate cut by the end of the year. This statement provides clearer guidance for the market.

Despite the U.S. April CPI meeting expectations, the job market remains resilient, and the May manufacturing and services PMI data performed excellently, but signs of interest rate cuts have begun to emerge. The Federal Reserve is considering easing capital requirements for large banks, which is seen as one of the important signals for rate cuts.

From a global perspective, the interest rate cut cycle seems to have started. A report by Nomura Securities pointed out that more than a dozen major central banks have begun to cut interest rates, and the European Central Bank and the Swiss National Bank are expected to follow suit before the end of June. Under the global trend of interest rate cuts, a rate cut in the United States is also a high probability event.

2. Nvidia Continues to Innovate at New Highs, U.S. Stock Style May Shift

NVIDIA's recent financial report significantly exceeded market expectations, with both revenue and net profit reaching historic highs. The company's stock price subsequently surged, and its total market value briefly exceeded $2.6 trillion, making it the third largest company by market capitalization in the U.S. stock market.

It is worth noting that among the "Big Seven" in the US stock market, the other six companies, except for Nvidia, experienced a decline on the same day. This highlights the significant contribution of the AI sector to the rise of the US stock market. In fact, excluding the AI-related "Big Seven" companies, the overall performance of the US stock market is not impressive.

However, with the arrival of the interest rate cut cycle, market liquidity is expected to improve, and risk appetite may increase. This could change the market landscape, bringing renewed attention to the non-AI sectors that have underperformed in the long term. The investment style in the US stock market may therefore undergo a shift.

3. Favourable Information on encryption assets is frequent, and the prospects for Ethereum ETF are bright.

In May, the encryption market experienced a strong rebound. Bitcoin once broke through 71,000 USD, and Ether surged over 20% on May 21, subsequently approaching 4,000 USD.

The recent surge is mainly attributed to the favourable information from the United States regarding the Ethereum ETF. On May 24th, the SEC officially approved the 19b-4 filing for the Ethereum ETF, laying the groundwork for future product listings. Although the S-1 filing has not yet been approved, the establishment of rules indicates that the listing of the Ethereum spot ETF is a done deal.

At the same time, the FIT21 Act was passed by the House of Representatives, providing clear guidance for the regulatory framework of digital assets. This paves the way for more encryption assets to apply for spot ETFs and for compliant development.

It is worth noting that the two parties in the United States seem to be using encryption assets as a bargaining chip in political games. Some Democratic lawmakers have begun to support easing regulations on the encryption industry, while Republican candidate Trump has publicly stated his intention to ensure the future of cryptocurrencies in the U.S. This shift in political attitude could bring more favourable information to the encryption industry.

4. Investment Strategy

1. Closely monitor the direction of global monetary policy and consider seeking opportunities in the bond market and interest rate sensitive assets.

2. Continue to pay attention to innovative leading enterprises in the technology industry and assess their long-term growth potential.

3. Pay attention to the regulatory trends and compliance processes in the cryptocurrency industry to seize emerging investment opportunities.

4. As the interest rate cut cycle approaches, consider adjusting the investment portfolio moderately and pay attention to the potential opportunities in non-AI sectors that previously underperformed.