Formally canceling its quantitative tightening policy on December 1, 2025, the Federal Reserve stopped the balance-sheet runoff that has drained around $2.2-2.4 trillion in liquidity since mid-2022. Instead of letting bonds mature without reinvestment, the Fed would now roll over maturing Treasuries and MBS, hence stabilizing bank reserves and stopping the never-ending squeeze on money markets that has pressured risk assets for more than three years.
For Bitcoin, Ethereum, and the bigger crypto sector, this marks the elimination of one of the major macro headwinds in recent years. QT has functioned as a constant liquidity vacuum; its absence reverses the script from contraction to neutral-to-accommodative conditions — especially when combined with projected rate cuts in 2026. Historical precedent from the 2019 QT pause saw crypto and risk assets soar 20-30% + in the following quarters as financing eased and capital moved out of yields.
Although the change isn’t full-blown QE and won’t flood the system overnight, it removes a significant drag right as reserves hit multi-year lows. Analysts are already describing it as softly positive for non-yielding assets: lower opportunity costs, cheaper dollar funding, and new fuel for institutional flows into spot ETFs and DeFi. While markets reorient, short-term chop is conceivable; nevertheless, the macro tailwind for BTC and ETH just swung definitively positive into 2026.
