The global interest rate cut cycle has begun, and the crypto assets market may welcome a strong rebound.

Recently, there have been significant changes in the macroeconomic situation, as major global central banks have begun a rate-cutting cycle, which may signal that the crypto assets market is about to recover from the summer slump and welcome a new bull market.

The USD-JPY exchange rate is a key macroeconomic indicator. To strengthen the yen, the G7 central banks seem to choose to convince the market that the interest rate differentials between the yen and other major currencies will gradually narrow. This requires the Federal Reserve, the European Central Bank, the Bank of Canada, and the Bank of England to lower their high policy interest rates.

It is noteworthy that the policy interest rate of the Bank of Japan is only 0.1%, while the rates of other countries are around 4-5%. Since the Bank of Japan holds a large amount of Japanese government bonds and cannot easily raise interest rates, the only option to narrow the interest rate differential is for other central banks to cut rates.

However, the current inflation rates in various countries are still above the target of 2%. Traditionally, central banks do not lower interest rates when inflation is above the target. However, this week, the Bank of Canada and the European Central Bank did just that, which is quite unusual.

This may be to address the issue of the weak yen. If the yen is not strengthened, it could trigger competitive devaluations by other countries, threatening the US-led global financial system.

The upcoming G7 meeting will be closely watched. They may announce some coordinated action to strengthen the yen, or agree that other countries besides Japan will start cutting interest rates.

Whether the Federal Reserve will cut interest rates as the U.S. presidential election approaches remains an open question. Given the impact of inflation on the election, the Federal Reserve may choose to keep its policy unchanged temporarily. The Bank of England may also unexpectedly lower interest rates.

Overall, major central banks around the world are beginning to shift towards loose monetary policies, which will boost the strength of the Crypto Assets market. Bitcoin and other Crypto Assets have been powerful tools against the traditional financial system since 2009. In the context of the current macro environment change, investors should consider actively going long on Bitcoin and other Crypto Assets, and new projects may also consider issuing tokens, as the market is expected to welcome a strong Rebound.