Quantitative Tightening Is Over – Will Bitcoin Lead the Next Rally?
The US Federal Reserve ended its Quantitative Tightening (QT) program on December 1, 2025, after reducing its balance sheet by $24 trillion since June 2022, shifting toward liquidity expansion with a $13.5 billion overnight repo injection—the second-largest since the COVID era.
QT had drained liquidity, curbing risk assets like Bitcoin by fostering caution and reducing inflows to speculative markets. This pivot could boost Bitcoin, as historical patterns show rallies post-QT halts—e.g., a 17% crypto surge after the prior end. Analysts like Tom Lee predict improved conditions, potentially driving Bitcoin to a new all-time high by late January 2026 amid anticipated Fed rate cuts. Bitcoin traded around $86,500–$87,000 on December 2, down slightly from recent peaks near $90,000, amid short-term volatility. Bitcoin may lead the next rally as liquidity floods risk assets, though past transitions (like 2019) saw initial dips before gains; forecasts eye $110,000+ by year-end if catalysts align.