According to a post by X shared by Barchart, the U.S. Federal Reserve is about to inject $6.8 billion into the market on December 22, 2025. In the last ten days, the central bank has injected a total of $38 billion. These latest measures are part of the central bank's response to year-end liquidity tensions. While officials consider it routine, the cryptocurrency market sees it as a precursor to a possible bullish trend.
Generally, cryptocurrency traders and investors associate higher market liquidity with a favorable environment. Risky assets, including cryptocurrencies, experience renewed positivity after market liquidity, with $BTC and other digital assets historically rising in response to similar developments. Money Ape, analyst and altcoin enthusiast, wrote on X: "More cash in the system means easier funding, less stress, and better conditions for risky assets like BTC and cryptocurrencies." Another key analyst, Rekt Fencer, stated:
"Liquidity is returning to the system The Fed is injecting again for the first time since 2020 The cycles do not end when liquidity expands They begin."
It is noteworthy that the Federal Reserve has officially ended quantitative tightening (QT) on December 1, 2025. This latest measure is carried out through repos, which help manage the liquidity of the financial system on a daily basis. Specifically, the Fed lends cash to banks against collateral such as Treasury bonds, and banks quickly repay the cash.
The repo is completely different from QT. While QT involves permanently buying assets to expand the central bank's balance sheet, the repo is temporary. Highlighting this key difference, analyst ImNotTheWolf posited:
"The fundamental point is that this is not quantitative easing, it is not about printing money, nor is it a sign that the Fed is loosening its monetary policy, as the money is being paid back. But yes, it shows that liquidity remains a bit precarious."
Furthermore, this move demands greater attention regarding its timely moment. It comes after the Federal Reserve's interest rate cut. The central bank reduced its rate by 25 basis points, to 3.5%-3.75%. This is the third rate cut in 2025.
While the Trump administration has frequently criticized the Federal Reserve's restrictive stance on cryptocurrencies and the tightening of its monetary policies, the bank's recent measures are undoubtedly beneficial for the cryptocurrency market. The recent interest rate hikes helped the market to recover slightly from its downward trend, while the injection of $6.8 billion is about to trigger a significant rally.
