Recently, while monitoring the market, I noticed a very interesting phenomenon: the same Federal Reserve interest rate hike news triggers completely opposite market reactions. On the day of the rate hike last week, I was watching data all night and gradually figured out the underlying logic—an interest rate hike cycle is essentially a "shuffle period" for the crypto market. During this phase, capital becomes extremely "picky," no longer buying into concepts, but quickly flowing into projects with real application scenarios, cash flow, and technical barriers.

First, let's correct a common misconception in the market: many people assume that a rate hike means a full decline in cryptocurrencies, but the reality is far from absolute. Looking at the 2023 rate hike cycle, many value-oriented tokens not only didn't fall but also achieved significant gains. The logic behind this is clear: as the crypto market matures, capital flows begin to differentiate, no longer following a single "prosper together, suffer together" pattern. Especially during a tightening liquidity cycle caused by rate hikes, smart capital will actively select and focus on projects with solid fundamentals, real applications, and moat advantages, while those purely driven by hype and concepts will be ruthlessly sold off.

Tokens that accelerate downward during rate hikes usually share a common trait: they lack real-world applications and rely solely on hype to maintain their prices. I call these "narrative tokens"—they have no product, no users, no cash flow, only a compelling story. The "shitcoin" projects from the past two years, various MEME coins, and those claiming to be leaders in certain sectors all fall into this category. When liquidity is abundant, these tokens can rise tenfold or even a hundredfold through carefully planned marketing and emotional contagion. But once the rate hike cycle begins, liquidity tightens, and capital becomes more selective, the true nature of these tokens is immediately exposed, and their declines are often the most brutal. During this rate hike, many projects claiming to combine "AI + crypto" have met similar fates.