The crypto assets market experienced a significant fall today, with Bitcoin's drop exceeding 1.1% and Ether's decline reaching over 2.5%. Other smaller crypto assets such as Cardano, DOGE, and Polkadot even saw falls exceeding 3%. This phenomenon has caused widespread confusion among market participants.

Many investors originally expected that, under persistent inflationary pressures, cryptocurrencies like Bitcoin would benefit from their safe-haven properties. However, the reality is quite the opposite, with the entire crypto assets market showing a downward trend. What is the root cause of this anomaly?
First of all, the disappointment in market sentiment is the main reason for this fall. The Federal Reserve did not release the "dovish" signals that the market expected in its latest policy statement. Previously, the market generally believed that interest rate cuts might begin in the second half of the year, so many investors preemptively positioned themselves in high-risk assets, including Bitcoin and Ethereum. However, the Federal Reserve's stance remains tough, and its vigilance against inflation has not eased. This unmet expectation led to a typical market reaction of "good news is bad news."
Secondly, we need to reassess the market positioning of cryptocurrencies such as Bitcoin. Although Bitcoin does have the potential to act as a hedge against inflation in the long term, in the short-term market conditions, most investors still view it as a high-risk asset, rather than a safe-haven tool like gold. In an environment where interest rates remain high and the dollar strengthens, investors are more inclined to sell crypto assets in favor of holding cash or dollar-denominated assets.
In addition, the technical break has further exacerbated the market's downtrend. Bitcoin and Ethereum are both hovering near important support levels, and once these key points are breached, it will trigger a large number of stop-loss orders, further intensifying the selling pressure. Meanwhile, there has been a net outflow of funds from Bitcoin ETFs recently, indicating that institutional investors are also gradually withdrawing, which undoubtedly impacts market confidence.
Overall, although cryptocurrencies like Bitcoin may have anti-inflation characteristics in the long term, in the current macro environment where the Federal Reserve maintains a hawkish stance and the dollar continues to strengthen, they are still viewed as the most vulnerable risk assets in the short term. Investors need to fully consider this market logic when formulating investment strategies and reasonably assess risks and opportunities.