What’s Next For The Crypto Bubble? Fed’s Liquidity Push Gives Signs
The Fed's pivot to expanding its balance sheet signals renewed liquidity, potentially fueling a crypto bull run but also risking a dangerous asset bubble.Summary
US Federal Reserve Chairman Jerome Powell announced the end of quantitative tightening and plans to expand the Fed's balance sheet starting December 1, effectively initiating a new phase of quantitative easing (QE). This move, described as a technical adjustment to ensure ample reserves, will inject liquidity into markets, potentially reigniting risk appetite and leading investors back to speculative assets like Bitcoin and Ethereum. While this could spark a powerful short-term bull run, skeptics, including Ray Dalio, warn that injecting easy money into an already overheated economy marked by record stock prices and inflation risks inflating a classic asset bubble. The long-term danger is that when inflation forces the Fed to tighten again, the reversal of liquidity could trigger severe sell-offs across all asset classes, including crypto.
(Source：BeInCrypto)