The Federal Reserve played a big move this time. Cutting interest rates by 25 basis points, with the rate falling to 3.5%-3.75%. It was initially seen as a positive signal. However, Powell's comments directly cooled the market, causing U.S. stocks to plunge. Conversely, the crypto market took the opportunity to soar.

The logic behind this move isn't actually complicated.

First, speaking about the rate cut itself. The Federal Reserve's meeting minutes explicitly mentioned "rising downside risks to the employment market," which means the policy has shifted from solely suppressing inflation to balancing economic growth. In other words: if economic data weakens, the likelihood of further easing increases. This is the Fed's trump card.

But Powell changed his tone. He repeatedly emphasized that "this rate cut should not be seen as the start of a easing cycle," and that the future "depends entirely on the data." The purpose of this statement is very clear—prevent capital from blindly flowing into traditional assets like U.S. stocks and bonds.

Why prevent? Because there are now many problems in the traditional financial markets. U.S. stocks are highly valued, bond yields are squeezed tightly, and capital's risk-reward ratio there is increasingly unattractive. When the Fed speaks like this, it's actually guiding capital to shift elsewhere.

Where to flow? The crypto market is one of the options.

The market reaction this time clearly illustrates the point. U.S. stocks fell, but Bitcoin instead rallied. Why? Because smart money has already understood: rate cuts release liquidity, but the ceiling for traditional markets is obvious, while crypto assets have become a reservoir for capital influx. Especially Bitcoin, which inherently has the "digital gold" attribute. Under expectations of easy monetary policy, its attractiveness rises sharply.

More importantly, the macro environment now is increasingly friendly to the crypto market. The Fed can't afford a hard landing; it can only slowly loosen policy; traditional asset returns are continuously compressed; meanwhile, the infrastructure and compliance processes in the crypto market are steadily advancing. When these factors combine, capital flowing into this space is the inevitable trend.

So what is the essence of this rally? It’s the Fed using policy rhetoric to guide capital along a path, and the crypto market just happens to stand at the crossroads.