There’s something that needs to be mentioned: the Federal Reserve’s Quantitative Tightening (QT) program officially comes to an end tonight at 11:59 PM Eastern Time. What does this mean for the crypto space? Simply put, the market will no longer be continuously drained of liquidity.

Let’s clarify the logic. The end of QT doesn’t mean immediate liquidity injections, but at least the tightening phase is definitively over. Liquidity pressures on the banking system will ease significantly, and the relentless upward momentum in US Treasury yields should also come to a halt. More importantly, valuations of high-volatility assets like BTC, which had been suppressed due to tight liquidity, now have room to recover.

Of course, stopping QT is not the same as restarting Quantitative Easing (QE)—these are two different things. The current state is more like shifting from hitting the brakes to easing off the pedal, and the market is starting to speculate about the next move: When will rate cuts come? Will the balance sheet expand? The policy bottom is already quite clear—shifting from passively deflating bubbles to actively supporting the market. This pivot represents an opportunity for risk assets.

BTC is very likely to benefit from this round. Once the liquidity environment improves—and with the market not having fully priced in rate cut expectations—the high elasticity of BTC will likely be amplified. Looking back at history, whenever a liquidity inflection point has occurred, BTC’s performance has generally been quite strong.