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Thursday Dec 4 2025 04:50
2 min
The Federal Reserve's recent announcement of ending Quantitative Tightening (QT) has sparked optimism in the cryptocurrency market. We've seen notable price increases in Bitcoin, Ethereum, and various altcoins. But is this rally the start of a new bull cycle, or just a temporary bounce in a bear market?
In 2019, after QT ended, the crypto market experienced a short-lived rally, but it soon slid into further decline until the start of Quantitative Easing (QE). Will this scenario repeat itself?
Today, the crypto market is significantly different from 2019. The market size has increased tenfold, and institutions are now the primary drivers instead of individual investors. Furthermore, the correlation between the crypto market and the US stock market has increased.
The crypto market appears to be following the movements of the US stock market. Therefore, merely ending QT may not be enough for a sustained recovery. What the market truly needs is Quantitative Easing (QE).
Despite expectations of QE starting, we must recognize that the crypto market is no longer the primary driver in the market. The emergence of Artificial Intelligence (AI) is capturing much of the attention and resources. This places a significant question mark on the future of the crypto market.
In short, we should be wary of excessive optimism or excessive pessimism. Ending QT is not necessarily the beginning of a new bull cycle. Quantitative Easing, and developments in other markets like AI, will play a crucial role in the future of cryptocurrencies.
Risk Warning: This article is provided for informational purposes only and does not constitute investment advice, investment research, or a recommendation to trade. The views expressed are those of the author and do not necessarily reflect the position of Markets.com. When considering shares, indices, forex (foreign exchange), and commodities for trading and price predictions, remember that trading CFDs involves a significant degree of risk and may not be suitable for all investors. Leveraged products can result in capital loss. Past performance is not indicative of future results. Before trading, ensure you fully understand the risks involved and consider your investment objectives and level of experience. Cryptocurrency CFD trading restrictions may apply depending on jurisdiction.
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