- Fed officially ends QT phase.
- This marks the end of the biggest liquidity drain since 2022.
- A bullish comeback may be on the horizon for crypto.
The start of December marks a momentous occasion as promised by the current Fed Chair, Jerome Powell. Last month, during his speech, Powell declared that December 1, 2025, would mark the end of Quantitative Tightening (QT), a phase that was drying up liquidity. Now, as the Fed officially ends QT phase, marking the end of the biggest liquidity drain since 2022, crypto enthusiasts hope to see a bullish reaction in markets.
Fed Officially Ends QT Phase
Ever since Powell’s speech last month, where he declared the end of QT, a process that involves shrinking the money supply by reducing the central bank’s assets, leading to increased interest rates and slow inflation, financial experts have been looking forward to the start of the final month of the year. Could this month save the crypto market and welcome a huge flood of liquidity?
Many analysts seem to believe so, while others disagree. This is because most analysts are aware that while QT has ended, there has been no announcement of QE beginning. To elaborate, Quantitative Easing (QE) involves a central bank buying assets to increase the money supply, lower interest rates, and stimulate the economy. This move has not been given the green flag yet, and unless QE begins, liquidity cannot flow in.
End of Biggest Liquidity Drain Since 2022
While some analysts expect an immediate start to QE, others believe that QE could commence after several months alone. Presently, with December just having kicked off and QT just officially ending, it is still too early to see how the market will react, especially after yesterday’s sudden drop in crypto prices. For now, analysts share their takes on the matter and reveal what to expect next.
As we can see from the post above, this analyst predicts that when QT finally ends, and the Fed enters the last leg of its rate-cut cycle, yields will keep sliding lower and that’s when the real rotation begins. The oversold plays, the charts that bleed while indexes and mega-caps that kept climbing higher, they’ll finally get their moment. The SP500 gets its ‘30-40% discount season’, while small caps, individual stocks, and crypto print higher lows across the board. The only thing now is the timing. This could potentially hit around April – May 2026, or wait for Nov – Dec 2026.
Similarly, another post highlights how the QT ending is a huge catalyst and highlights To Lee’s words about the Fed just stopping quantitative tightening — the biggest liquidity drain since 2022. Last time QT ended? Markets ripped +17% in three weeks. This matters for Bitcoin because liquidity is oxygen. When the Fed stops tightening, risk assets will front-run the shift. December might get a lot louder.
