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TL;DR
A Fed rate cut in September is now priced at >80 %. History shows cuts are not a guaranteed “buy” signal; outcome depends on whether the move is insurance (bullish) or rescue (bearish). Crypto’s two largest bull runs (2017, 2021) were liquidity-driven, but both ended in 70–90 % draw-downs. Today’s backdrop looks like an insurance cut, with $7.2 T parked in money-market funds ready to rotate. Expect a selective alt-season—quality over quantity.
Five Fed Cuts Since 1990—What Actually Happened
Cycle | Trigger | Style | Max Cut | Equities | Nasdaq | Notes |
|---|---|---|---|---|---|---|
1990–92 | S&L crisis, Gulf War | Rescue | 8 % → 3 % | +21 % | +47 % | Soft landing after recession |
1995–98 | Mid-cycle slowdown, Asia crisis | Insurance | 6 % → 4.75 % | +125 % | +135 % | Classic “soft landing” melt-up |
2001–03 | Dot-com bust, 9/11 | Rescue | 6.5 % → 1 % | –13 % | –13 % | 500 bps not enough vs. bubble unwind |
2007–09 | GFC | Rescue | 5.25 % → 0 % | –57 % | –56 % | ZIRP failed to stop crash |
2019–21 | Trade war → COVID | Insurance → Rescue | 2.5 % → 0.25 % | +98 % | +167 % | Liquidity tsunami post-March 2020 |
Take-away: Insurance cuts (1995, 2019) fed multi-year rallies; rescue cuts (2001, 2008) merely cushioned deeper falls.
Crypto’s Two Big Liquidity Bulls
2017 ICO Mania
Macro: Low-but-rising rates, leftover QE liquidity
Driver: ERC-20 ICO boom → ETH 8×, then 90 % crash of alts
2021 Everything Bubble
Macro: Zero rates + $120 B/month QE + stimmies
Drivers: DeFi TVL, NFTs, L1 wars
Peak: Total crypto cap $3 T (Nov 2021)
Draw-down: Alts ‑70–90 % once Fed pivoted hawkish
Pattern: Crypto upside is liquidity-beta squared—it outperforms on the way up and collapses on the way down.
Today: Insurance Cut + $7.2 T Powder Keg
Labor soft, inflation easing → insurance cut most likely
US money-market funds: $7.2 T record high → yields fall with cuts → rotation trigger
BTC dominance 59 % (down from 65 % in May)
Altcap +50 % since July, yet “alt-season index” only 40/100 → selective flows
Winners so far: ETH (ETF $22 B), stablecoin/RWA rails, high-FDV infra plays
Risks: Valuations & Macro Tailwinds
Most assets 80–90 % from lows; treasury-trades already crowded
Over-financialization: levered basis trades, high FDV/low float tokens
Geopolitics & tariff headlines can spark 20-30 % corrections overnight
Structural, not universal, bull—expect dispersion
Bottom Line
A September cut is likely an insurance move, not crisis firefighting. That tilts odds toward risk-on, but crypto has matured: capital will chase narratives with cash-flow, compliance, or killer use-cases. Bet on themes, not the index.
TL;DR
A Fed rate cut in September is now priced at >80 %. History shows cuts are not a guaranteed “buy” signal; outcome depends on whether the move is insurance (bullish) or rescue (bearish). Crypto’s two largest bull runs (2017, 2021) were liquidity-driven, but both ended in 70–90 % draw-downs. Today’s backdrop looks like an insurance cut, with $7.2 T parked in money-market funds ready to rotate. Expect a selective alt-season—quality over quantity.
Five Fed Cuts Since 1990—What Actually Happened
Cycle | Trigger | Style | Max Cut | Equities | Nasdaq | Notes |
|---|---|---|---|---|---|---|
1990–92 | S&L crisis, Gulf War | Rescue | 8 % → 3 % | +21 % | +47 % | Soft landing after recession |
1995–98 | Mid-cycle slowdown, Asia crisis | Insurance | 6 % → 4.75 % | +125 % | +135 % | Classic “soft landing” melt-up |
2001–03 | Dot-com bust, 9/11 | Rescue | 6.5 % → 1 % | –13 % | –13 % | 500 bps not enough vs. bubble unwind |
2007–09 | GFC | Rescue | 5.25 % → 0 % | –57 % | –56 % | ZIRP failed to stop crash |
2019–21 | Trade war → COVID | Insurance → Rescue | 2.5 % → 0.25 % | +98 % | +167 % | Liquidity tsunami post-March 2020 |
Take-away: Insurance cuts (1995, 2019) fed multi-year rallies; rescue cuts (2001, 2008) merely cushioned deeper falls.
Crypto’s Two Big Liquidity Bulls
2017 ICO Mania
Macro: Low-but-rising rates, leftover QE liquidity
Driver: ERC-20 ICO boom → ETH 8×, then 90 % crash of alts
2021 Everything Bubble
Macro: Zero rates + $120 B/month QE + stimmies
Drivers: DeFi TVL, NFTs, L1 wars
Peak: Total crypto cap $3 T (Nov 2021)
Draw-down: Alts ‑70–90 % once Fed pivoted hawkish
Pattern: Crypto upside is liquidity-beta squared—it outperforms on the way up and collapses on the way down.
Today: Insurance Cut + $7.2 T Powder Keg
Labor soft, inflation easing → insurance cut most likely
US money-market funds: $7.2 T record high → yields fall with cuts → rotation trigger
BTC dominance 59 % (down from 65 % in May)
Altcap +50 % since July, yet “alt-season index” only 40/100 → selective flows
Winners so far: ETH (ETF $22 B), stablecoin/RWA rails, high-FDV infra plays
Risks: Valuations & Macro Tailwinds
Most assets 80–90 % from lows; treasury-trades already crowded
Over-financialization: levered basis trades, high FDV/low float tokens
Geopolitics & tariff headlines can spark 20-30 % corrections overnight
Structural, not universal, bull—expect dispersion
Bottom Line
A September cut is likely an insurance move, not crisis firefighting. That tilts odds toward risk-on, but crypto has matured: capital will chase narratives with cash-flow, compliance, or killer use-cases. Bet on themes, not the index.
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