The Federal Reserve's balance sheet restarts expansion. What does this mean? Since the beginning of 2023, the Federal Reserve's balance sheet has experienced its first increase. Interestingly, looking back at the two major periods of Fed balance sheet expansion—March 2020 and March 2023—both times coincided with significant rises in cryptocurrencies like Bitcoin. The influx of new liquidity into the financial system could alter market expectations and risk appetite. When central banks release more liquidity, investors typically seek higher-risk, higher-return asset allocations, with the crypto market often benefiting. This historical resonance between policy and market movements warrants attention to the market's upcoming reactions.