Is the end of QT the beginning of a bull cycle that will last for years?

The U.S. Federal Reserve officially announced the cessation of its quantitative tightening (QT) program on December 1, after withdrawing more than $2.4 trillion in liquidity since 2022. This shift is not just a technical step, but a real turning point in the global liquidity cycle, especially after injecting $13.5 billion through repurchase agreements— the second largest daily injection since the Corona crisis. Despite the decline in cryptocurrencies before the announcement, historical data shows that the end of QT is often the first spark for the beginning of a deep bull wave for Bitcoin and alternatives alike.

In financial markets, liquidity is the most influential factor in determining the trends of high-risk assets. As the Fed stops reducing its balance sheet and starts short-term pumping operations, the mood shifts from "pulling liquidity" to "turning the taps back on." This shift usually does not show its actual effect immediately and may be delayed by a few weeks, but historically it has marked the beginning of major bullish cycles—just as happened after the end of QT in 2019, which was followed by the bullish wave of 2020–2021.

And although the Fed is paving the way for a potential rise, there is another factor that is no less important: the Bank of Japan (BOJ). During the last three times the BOJ raised interest rates, Bitcoin and the market as a whole clearly declined, due to the effects of the Carry Trade and the outflow of liquidity from global markets. With the likelihood of a Japanese interest rate hike rising to 81% this month, we may see short-term pressure before US liquidity returns to impose the overall trend.

Quick key points

  • The Fed ended QT after withdrawing $2.4 trillion since 2022.

  • Instant liquidity injection of $13.5 billion via Repo—larger than dot-com bubble levels.

  • Historically: End of QT → a rise between 17% and 30% in the first weeks, and a deeper rise later.

  • The period 2014–2017 and 2019–2022 witnessed a rise of alternatives lasting 29–42 months during the absence of QT.

  • The ALT/BTC ratio often touches 0.25 at the end of QT before the start of Altseason.

  • The likelihood of an interest rate hike from the BOJ = short pressure, but the direction of US liquidity remains stronger.

Overall, a clear scene is forming on the horizon: the end of QT opens the door to a more expansive liquidity environment, and this environment has always been the primary fuel for major bullish cycles in crypto. We may experience short fluctuations due to the decisions of the Bank of Japan, but the structural trend is gradually shifting towards positivity. If historical patterns repeat, the first or second quarter of 2026 may mark the beginning of the liquidity transition from Bitcoin to alternatives, and perhaps the start of a cycle that lasts for years—not months.

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