2025-12-31 11:23:01

Want to see how the Federal Reserve's purse strings influence the crypto market? Let's open the historical scroll and take a look.

How powerful have the US quantitative easing policies been? After QE1 was launched, the Dow Jones index rebounded straight up, during QE3 the Nasdaq surged by a cumulative 67%, and by 2020, during that unlimited QE, the Nasdaq index had risen over 130% in just over a year. How crazy is this kind of increase?

Although the crypto market is young, its gameplay is actually the same — liquidity goes where it flows. Just look at the 2021 crypto bull market: global central banks flooded the market, excess cash was everywhere, and a large amount of funds poured in, pushing Bitcoin to new highs. Conversely, in 2022 and 2023, as the Federal Reserve was tightening (QT), the crypto market followed the bear trend.

Now, the situation is changing. Although the Fed hasn't officially launched a new round of QE, it has paused its balance sheet reduction policy and has started some technical replenishment. What does this mean? The liquidity cycle is shifting from "tight" to "loose." From past experience, the initial window of liquidity easing is often the golden period for deploying risk assets.

In the short term, the crypto market may still experience some turbulence, but the long-term trend is gradually becoming clearer — a wave of easing liquidity is brewing.

BTC-0,74%

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UncleWhale

· 8h ago

Wait a minute, I need to pick apart this logic... QE flooding can push the NASDAQ up by 130%, so there's really nothing impressive about our current gains. Honestly, liquidity is like a drug; when the central bank loosens its grip, asset prices soar. The problem is, the drug's effectiveness is getting worse and worse. I saw that wave in 2021. Can we really do it all over again now? It doesn't seem that simple. Federal Reserve technical easing? Don't be silly, that's just sneaky liquidity injections. Long-term optimism is useless; in the short term, we still have to take a beating. That's the real truth. Lying in wait for a golden opportunity? I want to see how many people get trapped this time. The wave of easing has been "brewing" for several rounds; B2B sectors are almost falling asleep. It's basically betting that the Federal Reserve will really keep easing; risk assets are just chips. Can history repeat itself? That's the real question. The era of liquidity may never come back. Is crypto the same as stock market trading? Then why is crypto always being harvested?

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CryingOldWallet

· 8h ago

Oh my, it's that liquidity narrative again... I was already chopped into a twist last year.

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MemeTokenGenius

· 8h ago

Once again, it's the Federal Reserve printing money and the liquidity cycle. I'm tired of hearing this rhetoric. Can we get something different? --- Basically, it's a gamble on the Federal Reserve's purse. If you bet right, you double your money; if you bet wrong, you lose everything. I can't afford to play this game. --- Who didn't profit from the 2021 bull market? Now people are even more cautious. The feeling of whether liquidity is loosening or not isn't as important anymore. --- Technical liquidity injection? Sounds like playing word games. Whether it will actually materialize as expected remains to be seen. --- Bitcoin reaching new highs is a fact, but to say it's entirely following the Federal Reserve? I think there are other variables at play. --- Short-term volatility, long-term clarity—this kind of argument is most likely to lure new retail investors in. I'll remain skeptical.

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PumpBeforeRug