The current financial marketplace is experiencing a series of notable changes. The Federal Reserve is facing unprecedented challenges, and its monetary policy seems to be heading in an uncontrollable direction, which could signal the arrival of a new round of global liquidity expansion.

From specific indicators, the reserve ratio of the banking system has fallen below 9.7% of GDP, which is undoubtedly a warning sign of a liquidity crisis. Meanwhile, reverse repurchase agreements (RRP), used as a funds reserve, have bottomed out, and interbank lending rates have risen significantly, with an increase of 19 basis points. More notably, the fiscal deficit has surpassed the $2 trillion mark, leading to an unhealthy state of the Federal Reserve’s balance sheet.

Looking back to 2019, the Federal Reserve was forced to restart quantitative easing after failing to shrink its balance sheet. Today, history seems to be repeating itself, but perhaps in a more aggressive manner. The restart of quantitative easing policies is almost certain, meaning a large influx of new liquidity is imminent. From a global perspective, the current environment remains in an easing policy cycle, with countries inclined to cut rates, increase liquidity supply, and implement fiscal stimulus measures.

In this complex economic environment, savvy investors are not panicking but instead gradually allocating risk assets. Notably, gold prices have broken through the $4,000 level. At the same time, Bitcoin, with its unique supply mechanism—fixed total supply of 21 million and halving events—becomes increasingly scarce. Historical data shows that after gold prices rise, Bitcoin often follows closely behind, with potentially more significant gains.

Based on these observations, we can speculate that the 2021 cryptocurrency market bull run could reemerge at any time, and small-cap cryptocurrencies might also experience explosive growth. For example, certain crypto projects related to Elon Musk are showing growth momentum similar to some popular tokens in 2021.

However, we must emphasize that the cryptocurrency marketplace is highly volatile and uncertain. Investors should conduct thorough research and risk assessments before making any decisions. The above analysis is for reference only and should not be considered investment advice. In this fast-changing market, maintaining rationality and caution is crucial.