The Fed's interest rate cuts, as an important factor influencing the medium to long-term trend of Bitcoin, have brought systemic favourable information to Bitcoin through the release of macro liquidity and the reconstruction of asset allocation logic. The interest rate cut case in 2025 fully verifies this view.

First, lowering interest rates will reduce the yields on low-risk assets such as US dollar deposits and government bonds, prompting investors to shift their funds to high-elasticity risk assets like Bitcoin. For example, after the interest rate cut in September 2025, the cryptocurrency market saw a daily increase in liquidity of up to $80 billion, with Bitcoin's market capitalization accounting for more than 55%.

Secondly, interest rate cuts are often accompanied by an increase in the money supply, raising inflation expectations. Bitcoin, due to its fixed total supply of 21 million coins, has become an important tool for hedging against inflation. After the interest rate cut in 2025, institutional investors increased their holdings of Bitcoin through spot ETFs, with assets under management exceeding 58 billion USD, highlighting Bitcoin's anti-inflation properties.

In addition, the interest rate cut has led to a weaker dollar, making Bitcoin priced in dollars more attractive to global investors. This trend, combined with the ecological advantages of competing products like Ethereum, further solidifies Bitcoin's position as a core asset.

However, the impact of interest rate cuts on Bitcoin also has some potential risks and limitations. The market typically anticipates interest rate cuts in advance; for instance, before the expected rate cut in September 2025, Bitcoin had already accumulated an increase of over 15%, and after the policy announcement, it actually experienced a short-term correction. At the same time, the divergence within the Fed regarding the path of interest rate cuts may exacerbate market volatility. During the 2025 FOMC meeting, supporters and opponents of continuing rate cuts were almost evenly split, and this uncertainty led to increased short-term fluctuations in Bitcoin prices.

In addition, if the interest rate cut is due to an economic recession (such as a rate cut in 2025 accompanied by an increase in the unemployment rate to 4.3%), investors may prioritize traditional safe-haven assets like gold, and the risk asset nature of Bitcoin may put it under pressure in the short term.

Overall, the Fed's interest rate cut has a multifaceted impact on Bitcoin, bringing both opportunities and challenges. Investors need to comprehensively consider factors such as the macroeconomic environment, policy direction, and market sentiment in order to better grasp Bitcoin investment opportunities.