Recently, news about the Federal Reserve cutting interest rates has caused a frenzy in the crypto circle, with all kinds of opinions. Some are excitedly preparing to go all-in, while others worry that this might be another round of retail investor slaughter. Honestly, this is a question worth discussing thoroughly.

Let's start with the most basic logic. What is the essence of a rate cut? It’s to loosen liquidity, making money in the market cheaper. When bank deposits yield little, and the returns on financial products shrink, funds seeking high returns will become restless. They won't stay quietly in savings accounts but will look for better opportunities elsewhere. The cryptocurrency market, inherently associated with high risk and high reward, naturally becomes a key focus for these hot money flows. Therefore, according to historical patterns, during the early stages of a rate cut cycle, mainstream cryptocurrencies often experience a decent rebound.

But here’s a critical pitfall: this "positive effect" is not immediate; there’s often a lag in response. Moreover, the performance varies greatly among different coins, which is also the reason many people end up losing money.

Let’s look at specific data. In the 2019 rate cut cycle, Bitcoin took a full 21 days after the first rate cut to see a real bullish rally. Meanwhile, some smaller coins performed much worse, dropping about 15% before rebounding. In the second rate cut cycle of 2020, due to the special context of the pandemic, the rebound came faster, but the subsequent correction was also more intense. What do these historical lessons tell us? Rate cuts are not a button you press and immediately start making money.

Therefore, the practical advice is: in the early stage of a rate cut, don’t blindly go all-in. First, focus on the top ten cryptocurrencies by market cap, as these have better liquidity and risk resistance. Give yourself some time to observe the market’s true reaction, rather than blindly chasing the most surging small coins. History will repeat itself, but the details are always different.