The trends in the US economy are once again stirring the market's nerves. Recently, the White House economic advisor has thrown out a key signal: inflation pressure is actually not that tight, with a March average of only 1.6%, below the Fed's 2% policy target. The implication is clear – there is room for interest rate cuts.

As an observer who has been in this market for many years, I truly felt the weight of this news when I saw it. This could be the most important macro positive in the second half of this year. But to clarify what it means for Bitcoin, I need to talk about a few realities first.

**Rate cut ≠ immediate rise**

Don't get too excited. History tells us that when the Fed announces a rate cut, Bitcoin doesn't necessarily follow suit immediately. The case of the 25 basis point rate cut last December is a clear example—Bitcoin actually dropped by about 2.8%. Why? The market had already digested this information and reacted to it in advance.

**The real game is behind**

The key is that once the rate cut cycle is truly initiated, the subsequent effects will gradually be released. Borrowing costs will decrease, financing will become cheaper, and more idle dollars will flow through the financial system. At this point, the yields on "safe assets" like government bonds will also come down, and capital will naturally start to seek out more profitable opportunities.

Bitcoin, as a representative of "high risk and high reward," shows its appeal at this time. In an environment with ample liquidity, purchasing power often concentrates and erupts. From past cycles, these conditions have indeed created a breeding ground for bull markets.

**Chain Reaction of US Dollar Depreciation**

One more point that is often overlooked is that interest rate cuts typically drag down the dollar's performance. When the dollar weakens, dollar-denominated commodity assets become relatively more valuable. Bitcoin, as a cross-border asset, often performs impressively in such an environment. The combination of liquidity-driven factors and a pressured dollar is what we should focus on.