The financial markets caused a stir again last night. The Federal Reserve injected $16 billion in liquidity, and all kinds of assets were volatile. As an observer who has been active in the crypto space for many years, I must say: behind seemingly positive numbers, there are several easy pitfalls to watch out for.

First, let's look at how this $16 billion is allocated. Of which 73% is channeled through primary dealers, and 27% flows to overseas central banks. In other words, liquidity is moving from traditional finance into the crypto market, passing through market makers for pricing, and then entering via cross-border arbitrage channels. Historical data shows that this indirect transfer often takes 7-14 days to reflect in Bitcoin, but Ethereum might be faster, usually 3-5 days. The reason is simple: institutions use ETH more frequently to build complex strategies.

Another detail that is easily overlooked: during the same period, the scale of US Treasury reverse repurchase agreements decreased by $21 billion. It's like one hand is adding water while the other is draining it. The actual net increase in liquidity is negative. So don’t be fooled by the big numbers; the key is to watch how the balance sheet structure changes.

DeFi is also moving. Some lending protocols are starting to adjust the collateral factor for WBTC, lowering it from 75% to 72%. This is not a small move. A decrease in collateralization ratio means risk premiums are rising, which could be followed by increased liquidation pressure.