US Fed Ends QT with $13.5 Billion Liquidity Pump, Crypto Market Rally Ahead?

Core Viewpoint - The US Federal Reserve has officially ended its quantitative tightening (QT) program, signaling a potential shift towards liquidity expansion that may catalyze a new rally in the crypto market [1][3]. Group 1: Federal Reserve Actions - The US Federal Reserve injected $13.5 billion into the banking system through overnight repurchase agreements, marking the second-largest single-day liquidity operation since the COVID-19 crisis [2]. - The cessation of QT comes after the Fed withdrew approximately $2.4 trillion from the financial system since the tightening cycle began in June 2022 [3]. Group 2: Market Reactions and Predictions - Market experts, including Fundstrat's Tom Lee, believe that the end of QT could be a turning point for the crypto market, with historical data suggesting a potential 17% rally in markets within three weeks following the last QT cessation [4]. - Improved liquidity is expected to support stronger performance in risk assets, particularly Bitcoin, with projections indicating a possible new all-time high by late January [4]. Group 3: Global Monetary Policy Considerations - Attention is also focused on the upcoming Federal Open Market Committee (FOMC) meeting in December, where rate cuts are anticipated [5]. - Concurrently, the probability of a Bank of Japan (BOJ) rate hike has risen to 81%, which has historically led to selloffs in Bitcoin and the broader crypto market [6].