Based on current economic signals, the expectation that the Federal Reserve may cut interest rates four times by 2026 is worth taking seriously. The underlying logic is quite straightforward: declining housing prices and slowing employment growth are classic examples of the negative effects of continued tightening monetary policy.

Chief Investment Officer Navilier recently hit the nail on the head—persistent weakness in housing prices has amplified concerns about deflation, which is a real economic risk, not just a false alarm. Against this backdrop, it’s hard to justify the Fed sticking to high interest rates. Not only does the case for rate cuts become stronger, but if deflationary pressures continue to intensify, the magnitude of rate cuts could also increase.

What does this mean for crypto market investors? The most direct implication is that liquidity conditions will gradually loosen. Think about it—during an era of low or even negative real interest rates, institutions and long-term funds will need to find places to allocate their assets. Cryptocurrencies like Bitcoin, as tools to hedge against currency devaluation, will become significantly more attractive. Historical experience repeatedly confirms this—during easing cycles, crypto assets tend to attract more attention and influx of capital.

This shift is already brewing, and those who are early to position themselves should be thinking about how to seize this opportunity.