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Bitcoin Updates: Fed's Shift from QT Sparks Bitcoin's Bold Liquidity Bet

Bitcoin Updates: Fed's Shift from QT Sparks Bitcoin's Bold Liquidity Bet

Bitget-RWA2025/11/30 17:46
By:Bitget-RWA

Federal Reserve Policy Shift Sparks Bitcoin Optimism

The Federal Reserve’s recent announcement to halt its quantitative tightening (QT) program has reverberated throughout global markets, with Bitcoin emerging as a focal point for investors anticipating a potential resurgence. On October 30, 2025, the central bank revealed it would stop reducing its securities portfolio as of December 1, marking a move to stabilize liquidity after years of contraction. This policy change, together with the greenlighting of Bitcoin spot ETFs in January 2024, has reignited speculation over whether Bitcoin could experience a dramatic rally—possibly increasing its value sevenfold.

Institutional Momentum and Market Signals

The Fed’s decision to reverse QT—which had allowed $2 trillion in bonds to roll off since 2022—comes at a crucial juncture for Bitcoin. BlackRock’s iShares Bitcoin Trust ETF (IBIT), the largest spot Bitcoin ETF, has recently returned to profitability for investors as Bitcoin’s price surpassed $90,348. Although this is still below the October high of $126,080, it reflects renewed confidence among institutional players. According to blockchain analytics firm Arkham, the ETF now holds $3.2 billion in unrealized gains, suggesting that major investors may be regaining stability after recent volatility. BlackRock’s dominance in ETF inflows—amassing $21 million in net inflows over just two days—further highlights its influence on market sentiment.

Challenges and Uncertainties

Despite the positive momentum, Bitcoin’s path to a potential “7x” increase is not without obstacles. Political and economic uncertainties loom large. Nobel Prize-winning economist Paul Krugman has argued that Bitcoin’s price is increasingly tied to the political fortunes of Donald Trump, attributing recent declines to shifts in Trump’s influence. Krugman, a long-standing critic of Bitcoin, maintains that the cryptocurrency lacks fundamental value and behaves more like a speculative tech stock than a true currency. Nevertheless, the Fed’s renewed liquidity support may help ease some of these risks, especially as expectations for interest rate cuts grow ahead of the December 10 meeting.

Infrastructure Innovation and Institutional Adoption

Advancements in the crypto sector’s infrastructure are also shaping Bitcoin’s outlook.

Astra Bitcoin Trifecta Value Ecosystem

For example, Astra Bitcoin has introduced a “Trifecta Value Ecosystem” that combines gold reserves, real estate tokenization, and blockchain validator nodes, signaling a move toward assets with institutional-grade backing. This approach aligns with the Fed’s stabilization efforts by blending digital and tangible assets. Similarly, Mutuum Finance’s advancements in security audits and layer-2 solutions reflect growing institutional trust in decentralized finance (DeFi) protocols. As BlackRock and other major institutions continue to incorporate Bitcoin into their portfolios, these innovations could attract even more capital to the market.

Ongoing Risks and Market Evolution

  • Tether’s closure of its mining operations in Uruguay due to energy costs
  • Leadership instability at Trump-associated Alt5 Sigma

These examples underscore the sector’s inherent volatility. However, the Fed’s shift toward liquidity support and the maturation of crypto infrastructure may help counterbalance such risks. Nasdaq ISE’s initiative to increase BlackRock IBIT options limits to one million contracts demonstrates the deepening institutionalization of Bitcoin trading. Meanwhile, Binance’s tailored services for ultra-wealthy investors indicate that access to the asset class is expanding.

Outlook: A Pivotal Moment for Bitcoin

In summary, the Federal Reserve’s decision to end QT, combined with the approval of spot ETFs and increasing institutional participation, sets a promising stage for Bitcoin’s future. While political and structural challenges remain, the interplay of monetary policy, regulatory developments, and technological innovation could pave the way for a significant Bitcoin rebound. Whether the cryptocurrency achieves a sevenfold increase will ultimately depend on how these factors unfold in the months ahead.

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Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.

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