The Fed's interest rate cut has arrived as expected, and my logic and layout for entering a position were immediate.
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Last night was undoubtedly a sleepless night for global investors. The Fed, as the market widely expected, lowered the benchmark interest rate by 25 basis points, officially starting a new round of rate cuts. As a cryptocurrency market participant who is always attentive to macro trends, I took action immediately. This was not just a simple operation, but a firm belief based on historical cycles and liquidity logic.
1️⃣ Decisively increase positions, my choices and instant returns
Yes! Half an hour before the news landed, market sentiment had turned optimistic. I positioned myself in advance and made a second increase in my holdings during the fluctuations after the news confirmation. My logic is very clear: interest rate cuts mean the era of "cheap money" for the world's largest economy is returning, and the gates of liquidity easing are slowly opening. History has repeatedly proven that when the tide rises, all boats rise. As the forefront of risk assets, the cryptocurrency market is undoubtedly one of the biggest beneficiaries.
I mainly increased my position in three directions of assets:
· Market Leaders: BTC and ETH. This is an inevitable choice, as they are the "ballast" of the cryptocurrency market; any new funds entering the market will first go to them. A rate cut directly reduces the opportunity cost of holding these non-yielding assets, which is fundamentally positive for them.
· AI and Depin sector leaders: I have significantly increased my positions in assets such as FET (now ASI) and RNDR. I firmly believe that AI is one of the core narratives of this cycle, and the rising sentiment in tech stocks due to interest rate cuts will directly spill over into the AI sector of the crypto space. Depin (decentralized physical infrastructure) is also a high-potential area that I am optimistic about and can attract traffic.
· Gate platform's high-quality new coins and MVP section: I always pay attention to the new coin listings and MVP section on the Gate platform, where I can often discover early alpha opportunities. In a rate-cutting environment, market risk appetite is rising, and funds are more willing to chase small and medium-sized assets with high growth potential. I have positioned myself in several projects with solid fundamentals.
As of now, the returns are quite considerable, with the overall position yielding a floating profit of nearly 15%. Among them, the AI sector and MVP small-cap coins have far outperformed the market, proving the effectiveness of the strategy.
2️⃣ Recent short-term strategy: Arbitrage in volatility, hold in trends.
The market after the interest rate cut will definitely not be smooth sailing. The fluctuations of "buying the expectation and selling the fact," along with the uncertainties brought by subsequent economic data, will inevitably lead to significant market volatility. My short-term strategy is:
· Swing trading: For some highly profitable positions, I will take partial profits during sharp rises and decisively buy back when the market experiences a pullback due to panic, using volatility to reduce the average cost of my holdings.
· Focus on spot positioning, cautiously open contracts: Holding spot is the most stable strategy in a clear medium-term trend (interest rate cut cycle). High-leverage contracts are easily liquidated in severe volatility, and I choose to avoid them.
· Keep a close eye on Paulson's speeches and subsequent economic data: any hints about the future interest rate path will cause a strong reaction in the market, making it an important barometer for short-term trading.
3️⃣ Outlook on Potential Sectors: The Future Stars in My Eyes
Beyond the current hotspots, I believe the following sectors have tremendous upside potential during the rate cut cycle:
· RWA (Real World Assets): This is one of the grandest narratives in my opinion. In a rate-cutting environment, the advantages of on-chain bonds and other income-generating assets may temporarily weaken, but the narrative of RWA is about the large-scale on-chain of traditional world assets, which is a trillion-dollar market. Once there is a breakthrough, the entire sector will soar.
· DePin (Decentralized Physical Infrastructure): This sector perfectly combines hardware, blockchain, and token economic models. In a liquidity-easing environment, it is easier to obtain financing and carry out global infrastructure expansion, which I remain optimistic about.
· GameFi and the Metaverse: With rising risk appetite, funds are more likely to seek stories with explosive growth potential. Next-generation blockchain games with playability and sustainable economic models are likely to become the entry point for traffic and capital.
· Solana Ecosystem: Solana, with its high speed and low fees, remains one of the most active and innovative ecosystems. Under the liquidity spillover effect, high-quality Memecoins, DeFi, and Social projects within its ecosystem are likely to experience a surge again.