FED Officially Ends QT Policy: Analysis of Its Impact on the Cryptocurrency Market

Source: TokocryptoBlog
Original Title: Official: FED Halts QT, What Is the Impact on the Crypto Market?
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The US Federal Reserve (FED) has just officially ended its Quantitative Tightening (QT) policy, effective from December 1, 2025. This QT policy, which has been in place since 2022, involved reducing the FED’s balance sheet by selling assets and not renewing maturing bonds.

With the FED’s balance sheet now frozen at around $6.57 trillion, this move is expected to increase the flow of funds into risk assets, although it does not directly mean printing new money as in the Quantitative Easing (QE) era.

With the end of QT, it is expected that liquidity from bond reinvestments will gradually increase, potentially injecting up to $9.5 billion into the market each month. This could weaken the US dollar, lower borrowing costs, and spur bank credit expansion. Stock markets (like the S&P 500) and crypto assets are expected to reach new highs due to ample liquidity, with growth stocks particularly benefiting.

However, as noted by MFS Investment Management, a FED balance sheet larger than pre-pandemic levels may support long-term stability, but there are risks if inflation rises again.

The Impact of the FED Halting Quantitative Tightening (QT) on the Crypto Market

On December 2, 2025, Bitcoin was recorded breaking above $90,000, up more than 7%. This surge is believed to have been driven by several factors:

• The end of QT
• The FED injecting $13.5 billion in liquidity, the second-largest since COVID
• Expectations of a rate cut in December, with a forecast probability of 90%
• Increased institutional participation, including asset management firms opening the door for crypto ETF trading

Many analysts predict that the end of QT could be a catalyst for a crypto supercycle, similar to the 2019-2022 period, when altcoins experienced a significant rebound after QT ended.

However, based on historical data, the FED stopping Quantitative Tightening (QT) does not necessarily serve as a positive catalyst for the crypto market.

For example, when QT ended in October 2019, crypto assets did not surge in price; instead, they experienced a significant correction, dropping about 42%. This shows that simply ending liquidity tightening policies is not enough to trigger capital inflows into risk assets like crypto.

The major rebound actually occurred after March 2020, when the FED launched Quantitative Easing (QE) in response to the pandemic, injecting massive liquidity into the market.

For altcoins, with the end of QT, many claim that altcoins will outperform Bitcoin, based on historical patterns where altcoins rebounded when QT ended in 2019.

Analysts point to this trend, with the end of QT serving as a signal for rotating funds into higher-risk assets (like altcoins), potentially triggering an altcoin season.

Despite the many bullish narratives as QT ends, if the December PCE inflation data or jobs report shows unexpected growth, the FED could pivot back to a hawkish stance, causing volatility and corrections.

Additionally, the end of QT does not automatically mean QE, i.e., the central bank injecting massive liquidity into the market. Therefore, crypto investors need to be more cautious in analyzing global macro dynamics—including FED policy direction, liquidity conditions, and market sentiment—before making investment decisions.