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Fed Plans Quantitative Easing in December, Impact on Bitcoin Debated
Bitcoin's growth has been slower than anticipated, partly due to the Federal Reserve's quantitative tightening, which reduced liquidity in the market. However, this might change as the Fed signals a shift towards quantitative easing.
Quantitative Easing and Its Potential Impact
- The Fed plans to announce a move to quantitative easing on December 1.
- This policy involves increasing liquidity, possibly encouraging risk-taking among investors.
- Increased liquidity could benefit Bitcoin and other crypto assets as investors look for long-term opportunities.
There are debates regarding the impact on Bitcoin prices. Analyst Ted Pillows notes a previous price crash when tightening ended in 2019, but conditions differ in 2025.
Why This Time Might Be Different
- Analyst Sykodelic suggests that unlike 2019, current reserves aren't dangerously low.
- A $2 trillion fiscal deficit may compel the US to inject liquidity to avoid bankruptcy.
- Bitcoin has already experienced significant price drops, with MACD levels indicating low chances of further decline.
