Why does the crypto market consider the Fed injecting 100 billion in liquidity at the end of the year as favourable information?

[Block Rhythm] The Fed has taken new action. On December 22 at 10 PM Beijing time, the Fed will inject $6.8 billion into the market again through a repurchase protocol. This is not an isolated case — a total of $38 billion has been injected in the last 10 days. In simple terms, as the year ends, the entire financial system is starting to run low on cash.

What is a repurchase agreement? In simple terms, it is when the Fed lends money to banks, using quality assets like government bonds as collateral. The banks later have to pay back the money, usually the next day, so the cycle is very short. This is a standard tool for the Fed to manage daily liquidity, just like getting an IV drip for hydration.

But this time it's a bit different. The end of the year is originally a period of tension in the financial system, coupled with the recent adjustments made by the Fed to the rules of the standing repurchase agreement tool, this combination puts pressure on the market. The official statement is, of course, “routine operations” to maintain procedural justice. However, investors in the crypto space see this matter completely differently—they interpret it as a positive signal for risk assets. The Fed releasing liquidity means there is money in the market, and with money, it could flow into higher-yielding assets, including cryptocurrencies. This expectation gap often drives market sentiment.