Matrixport: The Fed's interest rate cuts have lagged market expectations for 32 consecutive months, requiring a cumulative cut of about 62 basis points in the coming months.

On August 15, Matrixport released its latest research report stating that the U.S. market is entering a new round of liquidity release cycle, and structural funding support may drive Bitcoin and risk assets to continue rising, with the market expected to extend until 2026. The current funding structure, credit environment, and the early stages of past bull runs are quite similar: ample liquidity, improved credit environment, and a shift in policy towards dovish, with multiple favourable information resonating to push asset prices upward. Since the fourth quarter of 2018, the scale of U.S. money market funds has rapidly expanded from $3 trillion to $7.4 trillion, setting a historical record, with current annual interest income reaching $320 billion, forming an important incremental funding flow to high-yield assets. At the same time, corporate buybacks are also noticeably accelerating. Since 2025, the announced buyback amount has reached $984 billion, with the total for the year expected to exceed $1.1 trillion. The current volatility is at a low level, and these funds will continue to flow into U.S. stocks and boost valuations. The structure of the financial system is further amplifying the impact of liquidity. Since 2008, the Fed has started paying interest on reserves to banks, with this amount currently reaching $3.4 trillion, generating an annual interest income of $176 billion. In the current high-interest-rate environment, this mechanism has made money market funds and commercial banks the main beneficiaries. The Fed's rate cut pace has lagged behind market expectations for 32 consecutive months; to narrow this gap, it will still need to accumulate about 62 basis points of rate cuts in the coming months. Credit issuance is warming up. Since April 2025, U.S. commercial and industrial loans have cumulatively increased by $74 billion, showing early signs of a new credit expansion cycle. Since June, credit spreads have been continuously narrowing, and the financing environment has improved, which historically has usually been favourable information for Bitcoin; this trend has also been preliminarily reflected in Bitcoin's price performance. Inflation will gradually fall back to the Fed's target range of 2%, and volatility is converging, providing more sufficient policy space for a rate cut in September. On the fiscal side, liquidity injection is also being intensified through bond issuance. Since the "Great Beautiful Act" raised the debt ceiling by $5 trillion, the Treasury has issued a net increase of $789 billion in government bonds in less than six weeks. This round of large-scale bond issuance coincides with Bitcoin starting a new round of rising trend. Historically, during the fiscal expansion cycle led by Trump, Bitcoin prices have often strengthened in sync with government bond issuance.