When discussing rate cuts and hikes, many people instinctively say: "Rate cuts are good for the market, rate hikes are bad." It sounds reasonable, but I have to say, this logic is really too crude.

Let's first identify the core misconception. Rate hikes and cuts are not price buttons; they are more like signals—telling the market whether money is now more expensive or easier to borrow. For traditional assets like stocks and bonds, this mainly concerns costs; but in the crypto world, what's more critical is when risk appetite will shift. Focusing only on "whether there is a rate cut" can easily cause you to overlook the actual period that truly determines the market trend.

I've fallen into this trap myself. I used to think that as soon as rate cuts began, the crypto market would take off, but after reviewing several cycles, I realized things are far more complex. Often, the market doesn't start moving on the "first rate cut" day. In some periods, even after rate cuts have occurred, the market still hesitates or even pulls back. At such times, you'll realize that the issue isn't the interest rate itself, but the expectations surrounding it.

Here's a key point of divergence. One view is: rate cuts = more money = rising risk assets. Another view is: the market's reaction actually reflects the "transition from tightening to easing," not the state itself. I lean more towards the latter.

Because markets tend to digest expectations in advance. When everyone is waiting for the Federal Reserve to cut rates and starts betting early, the actual implementation might not cause much movement. This is the part that's most easily overlooked.