Gold Finance reported that the Federal Reserve recently cut interest rates by 50 basis points, the first time since 2020, exceeding market expectations. After the rate cut, the price movements of virtual assets such as Bitcoin and Ethereum have attracted attention.

Some analysts believe that historically, the Fed has rarely cut interest rates by 50 basis points except in the face of major economic crises. This suggests that the Fed is taking more aggressive monetary easing measures to address potential downside risks to the US economy. This move reflects the Fed's high level of vigilance about the current economic situation.

In a rate-cutting environment, loose monetary conditions are often accompanied by abundant liquidity, providing a relatively favorable space for growth for high-risk assets. Virtual assets, due to their high volatility and strong risk appetite attributes, have become an important choice for investors seeking high returns.

However, the public also needs to deeply understand that the price fluctuations of virtual assets are not only determined by the short-term impact of liquidity expansion. While rate cuts can bring in capital inflows, they also signal potential problems in the US economy, especially against the backdrop of weak economic growth and increasing recession risks. Increased market uncertainty could disrupt virtual asset prices. Investors need to be wary of the impact of weakening macroeconomics on market confidence, especially when economic performance falls short of expectations or the Fed's monetary policy is adjusted.

For the virtual currency industry, price surges and crashes are almost the norm. Any investor should be aware of the risks associated with such high-risk assets.