The DeFi Report Was the Fed Rate Cut a False Signal for Crypto?
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Dec 17, 2025 
Michael Nadeau, a long-term crypto investor and author, discusses the implications of the Fed's recent rate cut and T-bill purchases. He argues that this move does not indicate a real easing in the market. Michael shares his risk-off strategy of maintaining 80% cash and outlines key indicators he monitors before shifting to a risk-on position. He delves into Bitcoin's on-chain metrics and explains how understanding cyclometrics can help signal market trends, including potential selling pressures stemming from cost-basis clusters.
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Stay Patient In Risk-Off Mode
- Remain patient and research during the risk-off phase rather than chasing rallies.
- Michael Nadeau keeps 80% cash and waits for clearer QE and price signals before increasing crypto exposure.
T-Bill Purchases Aren't True QE For Risk
- Buying T-bills is balance sheet expansion but does not suppress long-term yields.
- Without lower long-end yields, investors won't rotate into risk assets like Bitcoin.
Duration Compression Drives Risk-On
- True QE that drives risk-on compresses long-term yields and lowers corporate and mortgage rates.
- Those duration effects change discount rates and prompt reallocation into equities and crypto.