Recently, I've seen a lot of people getting excited about Federal Reserve moves. The Fed is about to purchase $8.165 billion in short-term Treasury bills, and many people are already calculating which crypto assets to add to their positions. But I need to throw some cold water on this — this operation is really not the kind of market positive you're imagining. Getting the direction wrong will likely result in losses.
What's the real essence of this operation? Simply put, it's "technical patching." Many people habitually confuse it with QE (Quantitative Easing), but these are two completely different things. The former is administering fever-reducing medicine to the market, while the latter is supplementary nutrition to restore health. How significant is the difference? Look at two key points.
First, the purpose. This purchase of short-term Treasury bills is primarily about stabilizing short-term interest rates and preventing abnormal fluctuations in the funding market — it's like quickly patching a leak in your home's pipes to avoid financial disaster. In contrast, QE is when the economy cools down and the central bank massively injects liquidity to rescue the market. The magnitude and intent are completely different.
Second, the impact on the crypto market. QE's kind of massive liquidity injection creates excess funds that flow in all directions and easily surge into our highly volatile market, adding fuel to the fire. But this type of technical operation is different — capital flows are characterized as "targeted stabilization," and basically won't flow into the crypto market. At most, market sentiment can be stabilized somewhat, but the concrete catalytic effect remains limited.
So, rather than staring at this news and rushing to add positions, you'd better first clarify the logic. My experience over 7 years in this space is that the easiest pit to fall into is confusing concepts and treating stabilization operations as stimulus policies.
Recently, I've seen a lot of people getting excited about Federal Reserve moves. The Fed is about to purchase $8.165 billion in short-term Treasury bills, and many people are already calculating which crypto assets to add to their positions. But I need to throw some cold water on this — this operation is really not the kind of market positive you're imagining. Getting the direction wrong will likely result in losses.
What's the real essence of this operation? Simply put, it's "technical patching." Many people habitually confuse it with QE (Quantitative Easing), but these are two completely different things. The former is administering fever-reducing medicine to the market, while the latter is supplementary nutrition to restore health. How significant is the difference? Look at two key points.
First, the purpose. This purchase of short-term Treasury bills is primarily about stabilizing short-term interest rates and preventing abnormal fluctuations in the funding market — it's like quickly patching a leak in your home's pipes to avoid financial disaster. In contrast, QE is when the economy cools down and the central bank massively injects liquidity to rescue the market. The magnitude and intent are completely different.
Second, the impact on the crypto market. QE's kind of massive liquidity injection creates excess funds that flow in all directions and easily surge into our highly volatile market, adding fuel to the fire. But this type of technical operation is different — capital flows are characterized as "targeted stabilization," and basically won't flow into the crypto market. At most, market sentiment can be stabilized somewhat, but the concrete catalytic effect remains limited.
So, rather than staring at this news and rushing to add positions, you'd better first clarify the logic. My experience over 7 years in this space is that the easiest pit to fall into is confusing concepts and treating stabilization operations as stimulus policies.