A bunch of people in the backend are asking, is the Federal Reserve changing personnel a sign to buy the dip or to run away? For events of this magnitude, looking at the present alone is not enough; we need to review the past records.

As an analyst who enjoys digging into historical data, I examined the three major leadership changes at the Federal Reserve over the past 40 years and surprisingly found a pattern: after each change, the performance of the crypto market (including early risk assets) is directly influenced by the "new leadership's policy style" and the "degree of market surprise." Today, I will walk you through these three cases to see how this round of leadership change might be responded to.

First, let’s clarify: before the emergence of crypto assets, Fed leadership changes mainly impacted traditional assets like stocks, bonds, and gold. Crypto assets, which carry the attributes of "digital gold" and also have the characteristics of "risk assets," inherit much of the pricing logic from traditional assets, especially being highly sensitive to liquidity and inflation expectations. A report from the New York Fed explicitly states that crypto assets are "speculative assets, more like an alternative to gold rather than a competitor to the dollar." In other words, the historical performance of gold and the stock market after Fed leadership changes is really relevant for us when analyzing the crypto market.

Let’s look at the first case: in 1987, when Volcker stepped down and Greenspan took over. Volcker was famously an "hawkish hardliner," using high interest rates to crush inflation; after Greenspan took over, he adopted a "flexible easing" approach, earning him the nickname "market firefighter." This situation is somewhat similar to now: the predecessor was hawkish, the new one dovish, and market expectations shifted from "tightening" to "easing." So, what happened? Gold...