During an FOMC press conference in October 2025, Federal Reserve Chair Jerome Powell indicated potential adjustments to the quantitative tightening process, signaling a pivotal change in US monetary policy.
This announcement could prompt a surge in cryptocurrency markets as increased liquidity flows into risk assets, emphasizing its significance for investors and markets globally.
Federal Reserve Chair Jerome Powell has indicated progress toward achieving balance sheet goals, hinting at the potential end of quantitative tightening (QT). This statement led to widespread anticipation of increased market liquidity, significantly impacting the cryptocurrency sector.
Key figures like Arthur Hayes and Raoul Pal reacted by expressing optimism for the crypto market. Arthur Hayes remarked that increased liquidity is imminent, while Raoul Pal predicted a surge in crypto asset prices, citing Powell’s statement as pivotal. Powell's recent remarks about the balance sheet goals further underline this optimism:
“We are making progress toward our balance sheet objectives, and discussions around adjustments to the pace and composition of quantitative tightening (QT) are ongoing.”
Immediate effects included significant inflows of stablecoins into major exchanges, as per Glassnode metrics.
BTC and ETH prices jumped by 9 % and 11 %, respectively, following the FOMC announcement, indicating a positive outlook among investors.
Financial implications are notable, with BlackRock confirming heightened client activity in digital assets. Furthermore, DeFi protocols like AAVE and Uniswap reported increased Total Value Locked (TVL), reflecting broader market confidence.
Historical patterns, like the March 2020 QE, suggest potential for a bullish cycle post‑QT.
The crypto market has previously seen substantial gains under similar circumstances, supporting the current optimism among stakeholders.
Regulatory and institutional responses are crucial. SEC and CFTC are monitoring market conditions, with emphasis on investor protection. This vigilance might influence future market dynamics, guiding stakeholders in their investment strategies.