“Oh yay, we got a rate cut that’s bullish for crypto.”

It sounds right on the surface, but it misses what actually matters. Rate cuts don’t magically pump markets. They mark a macro regime shift and those shifts are rarely clean or immediate. The first reaction is usually volatility as markets reprice expectations and unwind positioning. That chaos isn’t bullish or bearish yet, it’s just adjustment.

Liquidity also doesn’t rush in overnight. Central banks cut rates because growth is slowing, not because conditions are suddenly risk-on. Real inflows come later, when liquidity actually expands and confidence returns.

This is where sentiment splits. Retail celebrates the headline but institutions hedge, reduce risk and wait (think Warren Buffet cash). Even ETFs aren’t a cheat code here either, large players buy strength and clarity, not uncertainty.

A rate cut isn’t a green light, it’s a phase change:
- If expansion follows, crypto wins
- If recession follows, patience does

Miss that distinction and you become exit liquidity for those who don’t.