FED Officially Halts QT: Impact and Opportunities for the Crypto Market

Source: TokocryptoBlog Original Title: Official: The FED Stops QT, What’s the Impact on the Crypto Market? Original Link: The FED has just officially stopped Quantitative Tightening (QT) starting December 1, 2025. This Quantitative Tightening (QT) policy had been in effect since 2022, involving a reduction of the FED’s balance sheet through asset sales and not renewing maturing bonds.

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

As QT ends, liquidity is expected to increase gradually through bond reinvestment, potentially injecting up to $95 billion per month into the market. This could weaken the US dollar, lower borrowing costs, and encourage bank credit expansion. Stock and crypto markets are projected to reach new records as growth stocks benefit from this influx of liquidity.

However, a FED balance sheet larger than pre-pandemic levels could support long-term stability, but also carries risks if inflation rises again.

Impact of Ending Quantitative Tightening (QT) on the Crypto Market

On December 2, 2025, Bitcoin surged over 7% and broke above $90,000, a rise claimed to be driven by several factors such as: the end of QT, a $13.5 billion liquidity injection from the FED (the second largest liquidity boost after the Covid era), the expected rate cut anticipated for December with a 90% probability, and supporting factors including increased institutional participation, such as Vanguard starting to open the door for crypto ETF trading (BTC, ETH, XRP and SOL).

Many analysts predict the end of QT could be a catalyst for a crypto supercycle, similar to the 2019-2022 period when altcoins rallied after QT was halted.

However, based on historical data, the end of Quantitative Tightening (QT) by The Fed does not automatically serve as a positive catalyst for the crypto market.

For example, when QT ended in October 2019, instead of a price surge, crypto assets actually corrected quite sharply with a decline of around 42%, indicating that simply ending liquidity tightening policies is not enough to trigger capital flows into risk assets like crypto.

The major rally only occurred after March 2020, when The Fed relaunched Quantitative Easing (QE) in response to the pandemic, flooding the market with liquidity.

For altcoins, on the other hand, with the end of QT, many claim altcoins will outperform Bitcoin. This is based on historical patterns from when QT ended in 2019 and altcoins rallied.

Analysts highlight this trend, where the end of QT signals a rotation of funds into higher-risk assets like altcoins, potentially triggering an altseason. Historical data shows altcoins experienced uptrends of 42 months and 29 months when QT was inactive during the periods of 2014-2017 and 2019-2022.

Although there are many bullish narratives with the end of QT, if PCE inflation data or the December jobs report shows unexpected increases, the FED could turn hawkish again, sparking volatility and corrections.

Moreover, the end of QT does not automatically mean QE, which would see the central bank flooding the market with massive liquidity. Therefore, crypto investors need to be more discerning in reading global macro dynamics, including the direction of the Fed’s policy, liquidity conditions, and market sentiment, before making investment decisions.