The change of the Fed chair and the midterm elections at the end of the year, combined, could make the economic situation in the United States in 2026 much more complicated than everyone thinks. For the crypto world, this chain reaction should not be underestimated.

Let's first take a look at the economic "barometer"—the U.S. Treasury yield curve. It has been inverted for over 700 days since August 2022, breaking historical records. Even more concerning is that the depth of the inversion is approaching the levels seen before the Great Depression in 1929. The excess savings accumulated during the pandemic once acted as a "buffer," but now this cushion is being quickly depleted.

What does history say? The end of the yield curve inversion usually indicates greater risks. The patterns from 1929, the 2000 internet bubble, and the 2008 financial crisis all followed this rule without exception. Moreover, there is a pattern known as the "illusionary bull market"—after the curve repairs, the market will experience a brief rebound, but then it will decline. The current trend of the US stock market is somewhat reminiscent of historical precedents.

Looking closely, the signals are not optimistic: the employment growth rate is slowing, the credit card delinquency rate has reached a new high in over a decade, and the number of bankruptcies among large enterprises is increasing. The financial pressure on households and businesses is clearly rising. According to historical experience, the high-risk window for a recession roughly falls between the end of 2025 and the first half of 2026.

There are two key variables to watch in 2026. First, Powell's term ends in May, and the policy orientation of the new chairman will directly affect the interest rate trajectory. Second, the midterm elections in November; historically, the 'midterm election curse' often accompanies stock market fluctuations. With these two events overlapping, the market is likely to show a pattern of 'first suppression and then rise', with volatility being pulled to a considerably high level.

What do you think about how this wave of macro risks will be transmitted to crypto assets? Are there any coping strategies at this stage?