The end of the Federal Reserve's quantitative tightening (QT) program on December 1, 2024 marks a crucial shift for cryptocurrency markets.
Despite this milestone, experts note that the visible impact may take time. The expansion of the balance sheet may be delayed until early 2026 due to delays in treasury settlements, mirroring past cycles.
Historical patterns link the Fed's policy to the performance of altcoins
The Fed's monetary policy exerts increasing influence on the cryptocurrency market. Historically, when the Fed was not in QT, altcoins showed significant strength against Bitcoin, triggering multi-year rallies and altering market dynamics.
These changes signal a clear relationship between liquidity policy and the performance of crypto assets. Analyst Matthew Hyland identifies historical trends where periods without QT were followed by sustained altcoin rallies lasting between 29 and 42 months, highlighted by the OTHERS.D/BTC.D ratio.
Hyland's research highlights the periods of 2014-2017 and 2019-2022. During these years, the absence of QT allowed altcoins to sustain upward trends for 42 and 29 months, respectively.
“Historically, altcoins outperform BTC when QT is not active. Alts had an upward trend for 42 months and 29 months while QT was not active during 2014-2017 and 2019-2022. Based on the very strong correlation with the Fed's balance sheet, it is highly favorable that Alts will outperform BTC for many years to come,” wrote Hyland.
The OTHERS.D/BTC.D ratio, which compares the market dominance of altcoins to Bitcoin, rose as monetary conditions improved, encouraging greater risk appetite.
The Fed's approach closely mirrors these changes. From 2014 to 2017, a supportive stance led to strong growth in altcoins. Similarly, after QT ended in August 2019, another altcoin rally occurred and lasted until 2022. These cycles suggest that the Fed's liquidity policy is a central influence on crypto risk assets.
$OTHERSBTC & $WALCL (Fed Balance Sheet)
The End of QT marked the bottom on $OTHERSBTC back in August 2019.
This time, QT ends on December 1, 2025 👀
The $Alts Supercycle begins tomorrow! pic.twitter.com/IaoA2NoIrf
— CryptoBullet (@CryptoBullet1) November 30, 2025
Hyland noted that the current balance sheet, around $6.55 trillion and stabilizing after QT, supports optimism for superior performance of altcoins relative to Bitcoin for several years.
A critical level of 0.25 may signal the start of the altcoin season.
Technical analysis shows that the ALT/BTC pair historically bottomed at 0.25 after QT ended. This threshold is seen as a key marker signaling the potential start of an altcoin rally and may again indicate the next phase of upward momentum.
The ALT/BTC ratio is now at 0.36, above this vital support level. If this measurement approaches 0.25, it may signal the typical capitulation that precedes sustained strength of altcoins.
The 0.25 line has strong technical and psychological significance, often representing where altcoins regain upward momentum against Bitcoin.
Capital often rotates into alternative cryptocurrencies when Bitcoin's dominance falls. According to a Coinbase survey from August 2025, Bitcoin's dominance fell from 65% in May to about 59% in August.
This trend points to initial capital flows favoring altcoins, a hallmark of the "altcoin season."
Delays in balance sheet expansion can postpone market impact.
Although QT has officially ended, immediate effects are unlikely. The experience of 2019 shows that delays in settlements can postpone the observable expansion of the balance sheet and, by extension, the reactions of the crypto asset market.
Benjamin Cowen highlighted operational factors. In 2019, although QT ended in August, balance sheet growth was delayed as Treasury maturities were settled later that month. Thus, policy changes may take time to impact financial markets, including cryptocurrencies.
“Just because QT ends on December 1 does not mean the balance will immediately start to rise. It may take until early 2026 to realize this,” wrote Cowen.
These operational realities are important for market timing. Mechanisms such as treasury liquidations and reserve management can delay balance sheet expansion by months, creating uncertain conditions for traders awaiting a clear policy impact. Volatility may persist during this period.
Fed research highlights these complexities. Changes in the General Treasury Account and settlement schedules can distort short-term balance sheet readings.
The experience of August 2019 shows that patience is required before definitive market patterns emerge, likely in 2025 or 2026.
Despite short-term uncertainties, the outlook for altcoin markets remains constructive. Once the liquidity expansion promoted by the Fed becomes evident, historical trends indicate that altcoins typically benefit.
The article The End of the Fed's QT May Reignite Multi-Year Altcoin Rally was first seen on BeInCrypto Brazil.
