The European Central Bank cuts interest rates, and the next three months may be the last chance for digital currencies to enter

1. The European Central Bank once again opened the door to release water

On the evening of September 12, the European Central Bank officially announced its decision to cut interest rates, lowering the overnight deposit rate in the euro zone by 10 basis points to -0.50%. At the same time, the European Central Bank also announced that it will restart its asset purchase program (QE, quantitative easing) from November 1, with a scale of 20 billion euros per month.

According to the European Central Bank's latest interest rate meeting decision, the main refinancing rate and overnight lending rate among the three major benchmark interest rates in the euro zone remain unchanged at the existing levels of 0% and 0.25% respectively. The overnight deposit rate was cut by 10 basis points from -0.40% to -0.50%.

The decision to discuss interest rates has particularly attracted the attention of the outside world. The European Central Bank decided to restart and stop the implementation of quantitative easing for nearly a year from November this year.

Between March 2015 and December 2018, when the last round of quantitative easing was implemented, the ECB purchased a total of 2.6 trillion euros in assets through its asset purchase program.

European Central Bank President Mario Draghi said that the European Central Bank Governing Council expects the current round of quantitative easing to continue "until the eve of the European Central Bank starting to raise interest rates."

The amount of information in this news is simple and violent. To put it bluntly, it is the following three points:

1) Deposits in Europe now have negative interest rates;

2) The central bank restarted printing money to buy a large number of non-performing assets;

3) When will this printing of money end? For now, there is no deadline.

2. How will the release of water from the European Central Bank affect the follow-up situation?

Regarding negative interest rates, we have explained in previous articles, that is, ordinary people deposit money in the bank now not only does not have interest, but pays interest to the bank. As for printing money, the QE launched by the United States after 2008 made the world experience the flood of funds for the first time.

This time the European Central Bank once again implements this extreme policy, which marks the official opening of the flood gate in Europe, and in the foreseeable future, this gate will only open wider, and the flood of funds will only become more and more fierce.

As a result, the euro will go down the path of depreciation, and speculative funds will flood from Europe to all investment markets in the world.The digital currency market is no exception.

The fundamental reason why the European Central Bank took such measures is that the economy is weak, especially the manufacturing industry is in deep quagmire, coupled with the growing uncertainty of Brexit, forcing the central bank to take pre-emptive measures to prevent the situation from deteriorating.

In the United States on the other side of the ocean, the economic situation is also not optimistic. There is very little room for the Fed to cut interest rates, but the President of the United States is still exerting pressure, hoping to cut interest rates.

Now that Europe is one step ahead, it will inevitably bring more pressure to the Fed. Therefore, at the upcoming Fed meeting this month,Another rate cut by the Fed is almost a certainty.

Huge amounts of money will flow out of Europe and the US.

Just after the announcement of the European Central Bank's interest rate cut and restart of quantitative easing, major European stock indexes all rose. Germany's DAX rose 0.41 percent; France's CAC 40 rose 0.44 percent; Britain's FTSE 100 rose 0.09 percent.

This is just the foreplay of capital fermentation.

We believe that speculative funds will flock to the already severely bubbled U.S. stocks in a short period of time, and even with the possible interest rate cut by the Federal Reserve, the U.S. will be pushed higher.

But crazy games always come to an end.Once the U.S. bubble bursts and the credit of the euro and the U.S. dollar is questioned, funds will rush to gold, silver and digital currencies regardless of the cost.

3. The next few months will be a critical time window for ordinary investors

Recently, Coin Zhao Dong analyzed that the digital currency bear market is coming to an end, and the remaining three months of this year may be the last chance.

But here I also want to remind ordinary investors that in the next few months, as my country's economic situation will become more severe and the employment situation will not be optimistic, we must retain relatively sufficient liquidity.

And the varieties we invest must keep a close eye on the mainstream currencies led by BTC and Ethereum, and stay away from various CX coins and altcoins.