Bitcoin has been struggling to build momentum in recent weeks, and the return of cash into the system is raising questions about whether this could be the moment that changes the tone of the crypto market. That growing sense of anticipation has already started to show up in prices, with the total crypto market cap climbing more than $250 billion from its $3.016 trillion low on December 2. What Happened: The Liquidity Injection And Why It Matters After officially bringing its multi-year quantitative tightening (QT) program to an end, the central bank followed up with a $13.5 billion overnight repo operation, funneled through the New York Fed. Banks brought $13.5 billion in Treasuries to the Fed, the Fed accepted all of it, and instantly injected $13.5 billion of fresh reserves into the system. Related Reading: A Bitcoin Parabolic Rally Is Coming: Eric Trump Shares Why First Family Is Pro-Crypto The move, which is the second-largest liquidity injection since the COVID-19 crisis, effectively puts an end the steady shrinkage of bank reserves that has persisted for years, easing pressure on short-term funding markets and signaling a more accommodative liquidity environment. The crypto market responded almost instantly. A handful of major assets began turning green within hours of the injection, with Bitcoin leading the charge with an instant break above $92,000. The influx was visible at a macro level as well: the total crypto market cap climbed from a December 2 low of $3.016 trillion to $3.269 trillion by December 4. A gain of more than $250 billion in under 48 hours What Investors Should Watch Next Ending QT leads to better liquidity and often create a bullish environment for equities and other riskier investments like cryptocurrencies. However, although a single liquidity event does not guarantee a sustained multi-month rally, this injection stands out not just for its size but for what it represents.  Related Reading: 4 Bitcoin Indicators That Led To Market Rallies In The Last 2 Years Have Returned In a CNBC interview, Fundstrat’s Tom Lee stated that the Fed’s decision to stop QT will be a turning point for the cryptocurrency market. Lee pointed out that the last time the Fed ended QT, the market rose about 17% within three weeks. The previous time the Fed brought quantitative tightening to a stop was in July 2019, roughly a year after it began reducing its balance sheet. In the three weeks that followed, the S&P 500 climbed about 5%. Bitcoin’s also initially rallied in the same period, but its strongest reaction came months after, towards late 2019 and early 2020. Featured image from Pngtree, chart from Tradingview.comBitcoin has been struggling to build momentum in recent weeks, and the return of cash into the system is raising questions about whether this could be the moment that changes the tone of the crypto market. That growing sense of anticipation has already started to show up in prices, with the total crypto market cap climbing more than $250 billion from its $3.016 trillion low on December 2. What Happened: The Liquidity Injection And Why It Matters After officially bringing its multi-year quantitative tightening (QT) program to an end, the central bank followed up with a $13.5 billion overnight repo operation, funneled through the New York Fed. Banks brought $13.5 billion in Treasuries to the Fed, the Fed accepted all of it, and instantly injected $13.5 billion of fresh reserves into the system. Related Reading: A Bitcoin Parabolic Rally Is Coming: Eric Trump Shares Why First Family Is Pro-Crypto The move, which is the second-largest liquidity injection since the COVID-19 crisis, effectively puts an end the steady shrinkage of bank reserves that has persisted for years, easing pressure on short-term funding markets and signaling a more accommodative liquidity environment. The crypto market responded almost instantly. A handful of major assets began turning green within hours of the injection, with Bitcoin leading the charge with an instant break above $92,000. The influx was visible at a macro level as well: the total crypto market cap climbed from a December 2 low of $3.016 trillion to $3.269 trillion by December 4. A gain of more than $250 billion in under 48 hours What Investors Should Watch Next Ending QT leads to better liquidity and often create a bullish environment for equities and other riskier investments like cryptocurrencies. However, although a single liquidity event does not guarantee a sustained multi-month rally, this injection stands out not just for its size but for what it represents.  Related Reading: 4 Bitcoin Indicators That Led To Market Rallies In The Last 2 Years Have Returned In a CNBC interview, Fundstrat’s Tom Lee stated that the Fed’s decision to stop QT will be a turning point for the cryptocurrency market. Lee pointed out that the last time the Fed ended QT, the market rose about 17% within three weeks. The previous time the Fed brought quantitative tightening to a stop was in July 2019, roughly a year after it began reducing its balance sheet. In the three weeks that followed, the S&P 500 climbed about 5%. Bitcoin’s also initially rallied in the same period, but its strongest reaction came months after, towards late 2019 and early 2020. Featured image from Pngtree, chart from Tradingview.com

The $13.5 Billion Liquidity Injection That Could Send Bitcoin And Crypto Prices Flying

2025/12/06 03:00

Bitcoin has been struggling to build momentum in recent weeks, and the return of cash into the system is raising questions about whether this could be the moment that changes the tone of the crypto market. That growing sense of anticipation has already started to show up in prices, with the total crypto market cap climbing more than $250 billion from its $3.016 trillion low on December 2.

What Happened: The Liquidity Injection And Why It Matters

After officially bringing its multi-year quantitative tightening (QT) program to an end, the central bank followed up with a $13.5 billion overnight repo operation, funneled through the New York Fed. Banks brought $13.5 billion in Treasuries to the Fed, the Fed accepted all of it, and instantly injected $13.5 billion of fresh reserves into the system.

The move, which is the second-largest liquidity injection since the COVID-19 crisis, effectively puts an end the steady shrinkage of bank reserves that has persisted for years, easing pressure on short-term funding markets and signaling a more accommodative liquidity environment.

The crypto market responded almost instantly. A handful of major assets began turning green within hours of the injection, with Bitcoin leading the charge with an instant break above $92,000.

The influx was visible at a macro level as well: the total crypto market cap climbed from a December 2 low of $3.016 trillion to $3.269 trillion by December 4. A gain of more than $250 billion in under 48 hours

What Investors Should Watch Next

Ending QT leads to better liquidity and often create a bullish environment for equities and other riskier investments like cryptocurrencies. However, although a single liquidity event does not guarantee a sustained multi-month rally, this injection stands out not just for its size but for what it represents. 

Related Reading: 4 Bitcoin Indicators That Led To Market Rallies In The Last 2 Years Have Returned

In a CNBC interview, Fundstrat’s Tom Lee stated that the Fed’s decision to stop QT will be a turning point for the cryptocurrency market. Lee pointed out that the last time the Fed ended QT, the market rose about 17% within three weeks.

The previous time the Fed brought quantitative tightening to a stop was in July 2019, roughly a year after it began reducing its balance sheet. In the three weeks that followed, the S&P 500 climbed about 5%. Bitcoin’s also initially rallied in the same period, but its strongest reaction came months after, towards late 2019 and early 2020.

Bitcoin
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