Federal Reserve Ends Quantitative Tightening: A New Era For Crypto Liquidity Begins
The Federal Reserve officially ended its Quantitative Tightening program on December 1, 2025, freezing its balance sheet at $6.57 trillion and marking a pivotal shift in monetary policy that could reshape Bitcoin (CRYPTO: BTC) and cryptocurrency markets.
After draining $2.39 trillion from the financial system since June 2022, the Fed halted Treasury security runoff while continuing to reduce mortgage-backed securities at $35 billion monthly. The decision arrives as bank reserves hover around $2.89 trillion, approaching critical thresholds that threatened market stability.
What This Means For Crypto Markets
The three-year QT program represented the largest liquidity withdrawal in central banking history, putting sustained pressure on risk assets. Bitcoin currently trades around $86,600 as of December 2, down roughly 30% from its October peak. Exchange data shows nearly $1 billion in leveraged crypto positions were liquidated during Monday’s selloff, illustrating how thin liquidity amplifies volatility in highly sensitive digital asset markets.
Historical Parallels To 2019
Market analysts are drawing comparisons to August 2019, when the Fed …
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