Today Federal Reserve started a long awaited rate cutting program. They kicked it off with a fairly modest quarter percentage rate cut.
But most importantly they left a door open to more rate cutting this year. Expectations are for at least one more rate cut this year.
I believe that this is great news for American economy. Lower rates should further lower mortgage rates which have already been coming down and are sitting at the lowest level for this year.
They say "Don't fight the FED" meaning that when Federal Reserve is cutting rates it is time to switch to the more risk on assets. And what is more risk on than crypto?
I think we will soon see market move higher and rates on Certificates of Deposit, money market and savings accounts move lower.
That will cause a rotation out of these safe assets that are earning an attractive four plus annual percent into more risky assets like real estate and stocks.
As these assets move higher investors will shift towards even more risky assets and as they move up the risk curve they will eventually move into crypto.
At first they will get into the safest plays and assets like Bitcoin and Etherium then into larger altcoins that you can buy on Coinbase and eventually into more risky stuff like SPS.
Though I believe that this time it will be a bit different than previous cycles as we have a lot more institutions involved in the market and the big money will come into crypto that has ETFs.
For now that is mostly Bitcoin and Etherium, though Solana and XRP have some ETF coverage and more ETFs might come in time for the top of this bull cycle.
My big bet is on Etherium, with some exposure to Bitcoin. I also have some Solana and small bets on ONDO - real world assets narrative, AERO - main Decentralized Exchange on Base chain which Coinbase is heavily promoting and integrating into their Coinbase app. As well as NEAR which is my bet on AI in this bull cycle.
As you have noticed those are all larger market cap coins that you can buy on Coinbase. I believe that this cycle is the first cycle where general public is no longer viewing crypto as a scam. So when the non crypto American investors will come in they will buy ETFs first because they are available in their brokerage accounts. Then they will buy stuff that is available on Robinhood and Webull. Then more adventurous ones will buy crypto on Coinbase.
Very few will be adventurous enough to venture out into more esoteric stuff like decentralized exchanges and the one they might use would be Aerodrome Finance AERO, so that is great that Splinterlands has a USDC / SPS liquidity pool there.
I think we will see gaming become hot again towards the end of this crypto cycle and when it does coins that are listed on Base chain will pump. And that is when we might see a ten x or even a one hundred x in SPS. The market capitalization of Splintershards is so small that extreme swings are possible.
None of this is financial advice, this is just my vision for this crypto cycle and it will be interesting to see if any of it will come true.
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