Recently, news of the Fed cutting interest rates has set the crypto community abuzz. Some are shouting "the bull market is here," while others are cashing out and waiting on the sidelines. So, what does lower borrowing costs actually mean for us crypto players?

Here's the reality: when bank deposit interest rates are so low they're basically negligible, where will the money that used to sit in financial products go? The answer is simple—it will chase higher-yielding assets. Alternative assets like Bitcoin naturally become one of the options. More importantly, when more dollars are printed and the currency devalues, Bitcoin's "inflation hedge" narrative becomes even more convincing. The cost of borrowing in on-chain lending protocols also drops, which could heat up the DeFi ecosystem.

But don’t get excited too soon. Before the rate cut news is officially announced, the market usually rallies in advance—this is called "buying the rumor." By the time the news is out, there could be a pullback as profit-takers exit, which is "selling the news." Last year's market action after several FOMC meetings proved this point: those who chased the price on announcement days mostly ended up holding the bag at the top.

So what should you do? If you're a long-term believer, the smartest move now is to keep dollar-cost averaging, regardless of short-term price swings. If you’re looking to trade short-term swings, wait for panic to set in and then enter positions in batches—but make sure you set stop-losses. The market won't go easy on you just because you're losing money. As for newcomers, focus on studying mainstream coins like Bitcoin and Ethereum. Most projects promising "100x returns" are traps.

Bottom line, rate cuts do inject liquidity into the market, but in the end, the money will flow to projects with real technology and use cases. The bull market can make even pigs fly, but when the wind stops, the crash is even harder.