Bankless The DeFi Report Podcast | Was the Fed Rate Cut a False Signal for Crypto?
11 snips
Dec 17, 2025 
Michael Nato, a long-term crypto investor and author of the DeFi Report, delves into the implications of the recent Fed rate cuts. He argues that this move signals banking fragility rather than a genuine easing of financial conditions. Michael outlines the key indicators he watches for before investing in crypto and critiques the supposed benefits of T-bill purchases. He also examines Bitcoin's market structure, emphasizing the importance of on-chain analytics to identify potential market bottoms.
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T‑Bill Purchases Aren't Real QE
- Michael Nato argues the Fed's $40B T‑bill purchases aren't true QE because they don't suppress long‑term yields.
- He says risk assets won't rally until long‑end yields, mortgage rates, and corporate borrowing costs fall.
Duration, Not Size, Drives Market Reaction
- The crucial difference is the duration of assets the Fed buys, not balance sheet size alone.
- Suppressing long‑end yields (10y/30y) is what lowers discount rates and moves money into risk assets.
Wait For Real QE Signals
- Wait for clear signals before flipping risk‑on: falling real rates, compressed term premium, and lower mortgage and corporate yields.
- Do not treat the recent T‑bill program as permission to buy risk assets yet.