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The US Federal Reserve (Fed) will officially end quantitative easing (QT) on December 1, 2025. The crypto market is expected to rise.

On December 1, 2025, the Federal Reserve (Fed) will officially end Quantitative Tightening (QT). After withdrawing $2.39 trillion from the system, the Fed will freeze its balance sheet at $6.57 trillion.

There are parallels with 2019, when QT last paused. During that period, altcoins experienced a significant dip while Bitcoin experienced a significant surge. With liquidity returning and interest rates lowered to between 3.75% and 4.00%, cryptocurrency markets are preparing for a potential upward reversal.

Fed Ends QT Tomorrow: Cryptocurrency Expects 2019-Style Liquidity Increase

The Fed's suspension of balance sheet tightening comes at a time when banks' reserves are strained. These reserves, currently at approximately $3 trillion, are equivalent to 10% of US GDP. The Overnight Reverse Repo facility, which previously absorbed over $2.5 trillion in excess cash, has fallen to near zero, marking the elimination of a significant liquidity buffer.

In October 2025, the Secured Overnight Financing Rate rose to 4.25%, exceeding the Fed's target range. The Fixed Repo Facility saw a single-day activation of $18.5 billion, demonstrating sustained liquidity demand.

The FOMC minutes dated October 29th detail operational adjustments to improve policy transmission.

“The Committee has decided to end the reduction of total securities holdings on December 1st,” read the Fed’s statement on October 29th.

This means the QT officially ends on December 1st, and the Fed will no longer allow its securities to mature. From that day forward, the balance sheet will not shrink further.

The Committee noted that while unemployment remains low, downside risks to employment have increased and inflation remains “slightly elevated.”

This signals a long-term shift. Initially launched as an emergency tool, the Fixed Repo Facility now serves as a permanent daily liquidity provider and is ingrained in the Fed's Treasury market operations.

Past Parallels and Their Impact on the Cryptocurrency Market

Altcoins bottomed out when the Fed ended QT in August 2019.

While past performance is no guarantee, fundamental indicators support cautious optimism:

Bitcoin dominance is below 60%,

Global M2 money supply is increasing and has historically been 10–12 weeks ahead of BTC.

The expiration of QT could inject up to $95 billion in liquidity per month and support large-cap cryptocurrencies like Bitcoin, Ethereum, Solana, and BNB.

With gold recently reaching all-time highs, BTC typically lags gold price movements by about 12 weeks.

Meanwhile, the Fed's December 10th FOMC meeting is taking place under unusual circumstances:

The 43-day government shutdown erased two months of CPI data, depriving policymakers of new inflation figures.

The CPI is currently set at 3%, above the Fed's 2% target.

Treasury Secretary Scott Bessent confirmed that the Fed is considering further interest rate cuts following a 25 basis point cut in October.

The US federal debt exceeds $36 trillion, with annual interest costs exceeding $1 trillion. The Fixed Repo Facility now allows for the rapid liquidation of Treasury securities, a structural change with long-term market implications.

Some crypto analysts predict an immediate rally following the end of the QT, while others anticipate a smaller altcoin season within 2-3 months and a larger market cycle in 2027-2028.

Consensus suggests that liquidity, rather than hype or Bitcoin halvings, has historically driven crypto cycles.

December 1st is a significant turning point where the Fed's liquidity move could lift a major hurdle for risk assets. This move could provide clues about how crypto markets will respond, potentially marking the early stages of a mini-rally or a broader Supercycle.

As QT ends on December 1st, the US Federal Reserve (Fed) emphasized that future adjustments to the federal funds rate will depend on incoming data and changing economic risks.

This demonstrates that the Fed is maintaining flexible monetary policy and is prepared to adjust interest rates or other measures if necessary.

The Fed anticipates that it may formally announce its plans to slow or end QT in the next few meetings. This step is being taken to prevent a potential liquidity crunch. In previous statements, the Fed Chair has emphasized that the aim is to end QT with a soft landing.

What Effects Might It Have on Markets?

The end of QT could have a generally calming effect on markets. Specifically:

Volatility in Treasury bond markets could decrease.

Banks' access to liquidity could become easier.

This would create a more flexible environment for the Fed's future monetary policy actions.