Andrew Kang: Market participants overestimate the impact of Federal Reserve rate cuts and Chinese stimulus policies on cryptocurrencies

2024-10-10 10:30:09

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ChainCatcher news, Mechanism Capital partner Andrew Kang expressed his views on X, stating that market participants may have overestimated the impact of the Federal Reserve's interest rate cuts and China's stimulus measures on cryptocurrency prices.

He pointed out that the Fed's interest rates are just one of the factors affecting global liquidity, and global liquidity itself is only one of the factors influencing cryptocurrency prices. During a period when interest rates are nearing and reaching decades-high levels, Bitcoin surged 4.5 times, indicating almost no correlation between interest rates and Bitcoin. Then expecting a strong negative correlation when interest rates begin to decline seems absurd. Additionally, the positive impact of China's stimulus plan on stocks far outweighs its effect on cryptocurrencies, as Chinese traders have already noticed the migration of funds from cryptocurrencies to A-shares.

Kang believes that the market is still evolving, and new projects and capital rotations may lead to price fluctuations. Currently, it is expected that the cryptocurrency market will fluctuate between $50,000 and $72,000 until a substantial catalyst emerges.

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