2025-12-23 05:20:15

The gateway of liquidity has opened again, but this time, it has become somewhat unclear where the money is flowing.

The Federal Reserve did not quietly act in a closed-door meeting, but instead laid its cards on the table in front of all traders. Within ten days, $38 billion of Liquidity was forcibly injected into the market, with a single operation injecting $6.8 billion last night. How outrageous is this scale? It's more intense than the bailout funds during the internet bubble.

As someone who has been through the ups and downs of the market for many years, I can sense this unusual atmosphere - this is no longer a conventional operation. The Federal Reserve is easing, while the Bank of Japan is tightening, and cryptocurrencies have once again become a testing ground for the policies of major powers.

**Where does the money come from?**

In early December, the Federal Reserve's quantitative tightening (QT) completely stopped. This is the first time since 2022 that the central bank is no longer extracting blood from the market. This shift is more significant than a direct interest rate cut.

But this round of monetary easing is quite different from the one during the COVID-19 outbreak in 2020. Back then, it was all about printing money; now, the Federal Reserve is much more precise - they are only buying short-term Treasury bills, with a clear purpose: to boost confidence in the money market, rather than reverting to the old path of quantitative easing.

This technique of "shooting where you point" is, to put it simply, the Federal Reserve walking a tightrope between controlling inflation and preventing recession. One hand needs to be steady, and both hands need to be strong.

**The Rift Between East and West**

Interestingly, when the Federal Reserve is loosening, the Bank of Japan is doing the opposite - tightening its policy. This divergence has caused waves in global capital flows, with the cryptocurrency market being the first to feel the pressure. Both bulls and bears are speculating on where it will go next.

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0xLuckbox

· 12-23 05:47

38 billion poured in, but the money still can't find its owner, this matter is a bit precarious. The Fed is singing a different tune from the Bank of Japan, and our encryption has become a punching bag, whoever wins eats our blood. This time is different from the wave in 2020, precise point shaving is even more unsettling, I really don't know how to proceed next. Speaking of short-term treasury bills, is this method intended to stabilize inflation or is it fear of recession? It's really hard to have both fish and bear's paw. A testing ground for major country policies, just sounds unpleasant, waiting for the day to be hit back.

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YieldHunter

· 12-23 05:41

honestly, if you look at the data on these repo operations, the fed's basically playing whack-a-mole with liquidity—$38b in 10 days? that's not elegant monetary policy, that's panic-adjacent

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FlashLoanLord

· 12-23 05:30

38 billion thrown in and still can't find the door, this time the Fed is really playing with fire. Too much money has instead led to chaos, who knows in the end who benefits. The central banks of the US and Japan are performing reverse operations, and we in the crypto world have become pawns, annoying. Short-term treasury bills as a strong wick candle? It still feels like paving the way for what’s to come. This wave of liquidity will ultimately flow to the big institutions, and retail investors will be played for suckers again.

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LiquidationWatcher

· 12-23 05:24

ngl this fed move screams desperation... $38B in 10 days? that's not normal rate maintenance, that's panic mode. been there, lost that back in '22 when they started this dance. watch your health factors fr fr, collateral ratios don't lie when things get sideways like this.

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