The latest data from CME's Fed Watch Tool shows that the probability of a rate cut in December has surged to 86.9%, and the market almost considers "rate cut" as a done deal. Even more aggressive is the expectation of two rate cuts by January next year, which has reached 23.1%—the signals for a looser monetary supply are becoming increasingly strong.

But does a rate cut really mean "the price of currency will soar"? Don't be fooled by surface phenomena.

The essence of interest rate cuts is to lower the cost of holding dollars, prompting funds to seek higher-yield risk assets, and the crypto market is indeed one of the beneficiaries. However, the flip side is that loose policies will raise inflation expectations, which will make the Fed more cautious in subsequent operations. More importantly, the market has already started to "run ahead"—Bitcoin recently broke through $90,000, largely digesting the expectations of interest rate cuts in advance.

This brings about a paradox: by the time the policy is actually implemented, the benefits may have already been squeezed dry. Historical experience tells us that a "shoe dropping" is often accompanied by a short-term correction, as the funds that should have entered the market have already done so, leaving only the space for profit-taking.

What should retail investors do? Three principles:

First, do not go all in chasing highs when emotions are at their peak. The market has already heated up; wait for the interest rate cuts to actually take effect and then observe the flow of funds before deciding on actions.

Second, focus on allocating assets with strong "anti-inflation" properties. Bitcoin, as digital gold, often performs more stably than altcoins during loose monetary periods.

Third, be wary of the "false breakout" trap. If the price of the coin falls instead of rising after the interest rate cut, it is likely that the main force is selling off due to the favorable news. At this time, do not hold on stubbornly; stopping losses is more important than faith.

Policies can indicate the general direction, but making money relies on knowledge and discipline. Don't bet your fortune on "gambling on policies"; the crypto world has never been a casino, but a long-term game that tests patience and judgment.