In financial markets, sudden institutional changes often trigger immediate reactions from investors. This reaction typically manifests as risk aversion rather than rational analysis. For example, when faced with unexpected shocks, traders' primary action is to reduce their Holdings, rather than deeply considering the Intrinsic Value of Bitcoin.

This phenomenon is particularly evident during fluctuations in the dollar system. Risk assets, including Bitcoin, often bear the brunt of the impact. This reflects the market's inertia. A true revaluation of value usually requires waiting for the market to settle after the initial panic.

Although Bitcoin is often described as a decentralized hedge tool, it is still classified as a high beta risk asset in the eyes of most institutional investors, similar to the Nasdaq index. When interest rates are uncertain and risk premiums rise, Bitcoin often becomes one of the first assets to be sold off. Between narrative and trading logic, the market always prioritizes the latter.

However, the influence of political factors on monetary policy does not mean an immediate easing of monetary policy. Politicians may be more inclined to adopt a strategy of lowering short-term interest rates while raising long-term interest rates, to align with their fiscal policy and electoral interests. This complex interest rate environment does not have a singular effect on Bitcoin; rather, it may lead institutional investors to choose to wait and see.

Currently, a major challenge facing the cryptocurrency market is the lack of active buying. Although the turbulence of the Federal Reserve should have favored the investment narrative for Bitcoin, the market lacks proactive incremental funds and relies solely on passive inflows. Without enough buyers to take up the positions, even the most compelling investment logic struggles to be directly reflected in price movements.

Overall, the recent decline in Bitcoin does not mean that its investment narrative has been negated, but rather reflects a short-term market reaction dominated by capital flows and trading logic. In the long run, the politicization of Federal Reserve policy may actually strengthen Bitcoin's position as a hedging tool. However, the market's pricing of this may lag, and it may take until the next major event shock to fully reflect it.