QCP Asia Colour – 19 December 24 The hawkish FOMC triggered a sharp selloff across all risk assets. Nasdaq plummeted 3.56%, S&P 500 dropped 2.95% and BTC declined 6.13%. While the Fed's 25bps cut was expected, the source of panic can be attributed to the dot plot which was revised lower. Due to persistent inflation, the Fed now projects 2 rate cuts for 2025 compared to the market’s consensus of 3 rate cuts. BTC fell to a day low of 98,800 during the Asia session with multiple altcoins suffering losses of at least 10% as the market saw US$258.6 million worth of longs being liquidated. While it it easy to blame the selloff on the Fed’s hawkish cut, we believe the root cause of the morning’s crash to be market’s overly bullish positioning. Since the election, risk assets have enjoyed an impressive one-sided run, leaving the market extremely vulnerable to any shocks.