Federal Reserve Rate Hike Uncertainty Spreads Fear in Crypto Market
The upcoming September Federal Reserve rate hike has left investors and economists divided.
The market consensus suggests that a rate cut cycle will resume in 2027, but most economists believe it will not happen until then. A key indicator is the July Consumer Price Index (CPI) report, which will be released on August 12. If the data shows that June's moderation was genuine and sustainable, the probability of a September hike will likely fall back towards economist consensus.
A rate hike would have significant implications for the crypto market, with direct and rapid downward pressure expected to exert on sentiment. AI-related tech giants such as Figure AI and UBTech are also at risk, as rising corporate financing costs could compress their marginal returns and make it difficult to justify 'burning cash on AI for growth'. Companies with already negative cash flow and no compelling growth story may experience violent stock price swings.
The recent 'AI Stock Guru Blowup' and 'Korean Stock Crash' are symptoms of the same underlying condition: leverage fostered by over a decade of low and stable interest rates. The frequent occurrence of 'small volatility' events is no coincidence, with analyst Rob Armstrong noting that Fed Chair Warsh's withdrawal of forward guidance may be a deliberate policy choice to reintroduce an 'uncertainty premium' to the market.
In other news, Unitree Robotics' IPO is expected to raise RMB 4.2 billion, with the company issuing 40.4464 million shares at an estimated price of RMB 104 per share. This would value the company at approximately RMB 42 billion, or around $6.2 billion. The P/E ratio would be around 70x based on 2025 non-GAAP net profit attributable to parent, and 25x price-to-sales.