Matrixport: The Fed has lagged behind market expectations in its interest rate cuts for 32 consecutive months. It is expected to cut rates by a total of approximately 62 basis points over the next few months.

BlockBeats News, August 15th. Matrixport released its latest research report stating that the U.S. market is entering a new liquidity release cycle, with structural funding support potentially driving continued upside for Bitcoin and risk assets, with the market expected to continue until 2026. The current fund structure, credit environment, and policy shift to dovishness closely resemble the early stages of past bull markets: abundant liquidity, improved credit environment, and dovish policy shifts, all multiple bullish factors resonating to drive asset prices higher.

The U.S. money market fund has rapidly expanded since the fourth quarter of 2018, from $3 trillion to $7.4 trillion, reaching a historical high, with current annual interest income reaching $320 billion, constituting significant incremental funds flowing into high-yield assets. At the same time, corporate buybacks have also significantly accelerated. Since 2025, announced buyback amounts have reached $984 billion, with an expected full-year scale to exceed $1.1 trillion. With current low volatility, these funds will continue to flow into U.S. stocks and drive up valuations.

The financial system's structure is further amplifying the impact of liquidity expansion. Since 2008, the Federal Reserve has started paying interest on bank reserves, with this fund currently amounting to $3.4 trillion, generating annual interest of $176 billion. In the current high-interest-rate environment, this mechanism has made money market funds and commercial banks the primary beneficiaries. The Fed's rate cut pace has lagged market expectations for 32 consecutive months. To narrow this gap, a cumulative rate cut of about 62 basis points is still needed in the coming months.

Credit issuance is warming up. Since April 2025, U.S. commercial and industrial loans have increased by $740 billion, showing early signs of a new credit expansion cycle. Since June, credit spreads have continuously narrowed, improving the financing environment, which historically has been positive for Bitcoin. This trend has also been preliminarily reflected in Bitcoin's price performance. Inflation is gradually expected to fall to the Fed's 2% target range, and volatility is tending to converge, providing more ample policy space for a rate cut in September.

On the fiscal side, liquidity injection through debt issuance is also underway. Since the "Great Beautiful Act" raised the debt ceiling by $5 trillion, the Treasury Department has already net increased $789 billion in government bonds in less than six weeks. This round of massive debt issuance is coinciding with Bitcoin starting a new uptrend. Historically, during Trump-led fiscal expansion cycles, Bitcoin prices have often strengthened synchronously with government bond issuances.