The latest statement from the Federal Reserve FOMC releases key signals: $40 billion in treasury bonds will be purchased within the next 30 days. This action may seem focused on traditional financial markets, but it will have a chain reaction on the cryptocurrency market through dimensions such as liquidity and market sentiment.
1. Core logic: Expectations of liquidity easing are favorable for risk assets.
The essence of the Federal Reserve purchasing treasury bonds is an operation that injects liquidity into the market—equivalent to directly supplying US dollars to the financial system, alleviating the tightness of market funds. Cryptocurrencies, as typical risk assets, have always been highly sensitive to US dollar liquidity.
In a liquidity easing environment, idle funds in the market will increase, and some of these funds will flow into cryptocurrencies like Bitcoin and Ethereum, driving up price trends;
During the previous Federal Reserve rate hike cycle, the cryptocurrency market faced continuous pressure due to the tightening of the dollar. The "easing" signal released by this bond purchase action will reverse the market's pessimistic expectations on liquidity and boost risk appetite.
II. Divergence of Short-term and Medium to Long-term Effects
Short-term: A Rebound Window Driven by Emotion
After the statement is implemented, the cryptocurrency market is likely to experience a wave of emotional price increase. On one hand, the market will quickly price in expectations of "liquidity easing," leading to short-term surges in mainstream cryptocurrencies like Bitcoin and Ethereum; on the other hand, leveraged and speculative funds will seize the opportunity to enter, amplifying short-term volatility.
Medium to Long-term: Be cautious of the "good news materializing" and policy fluctuations.
$40 billion in bond purchases is not a significant easing in terms of the Federal Reserve's balance sheet, but rather a phase of liquidity adjustment, not a new round of quantitative easing (QE). If the Federal Reserve does not signal further easing, the cryptocurrency market may experience a pullback due to "good news already priced in"; furthermore, if U.S. inflation data fluctuates, and the Federal Reserve shifts to tightening policy, cryptocurrencies that previously rose on liquidity expectations will still be under pressure.
III. Differences in Impact Among Different Cryptocurrencies
Mainstream Coins (Bitcoin, Ethereum): Benefit the most directly; as the "barometer" of the cryptocurrency market, the capital inflow driven by liquidity expectations will be reflected primarily in these types of coins;
Altcoins/Niche Coins: In the short term, they may follow mainstream coins in rebounding, but due to their weak fundamentals, they will be more volatile and have poorer rebound sustainability;
Stablecoins: Easing of dollar liquidity may slightly alleviate the de-pegging pressure on stablecoins like USDT, and market trading activity will also increase accordingly.
IV. Investor Strategies in the Cryptocurrency Market
1. In the short term, attention can be paid to trading opportunities driven by liquidity expectations, but position sizes should be controlled to avoid chasing highs;
2. Do not equate this bond purchase with the "start of a long-term bull market"; it is necessary to track the subsequent statements of the Federal Reserve and U.S. economic data;
3. Focus on solid mainstream cryptocurrencies with strong fundamentals, avoid air coins without real application support, and reduce short-term volatility risk.
Overall, the Federal Reserve's bond purchase action brings short-term emotional boosts and marginal liquidity improvements to the cryptocurrency market, rather than changing the core variables of market trends. The cryptocurrency market still needs to return to its fundamentals and the overall direction of global macro policies; investors should view this positive news rationally and avoid overinterpretation.
