Let's talk about something everyone loves to watch. This time, we can set aside interest rate cuts and the dot plot from the FOMC; RMP (Reserve Management Purchase) is the game changer. For Bitcoin and Ethereum, this $40 billion/month purchasing plan is more direct and effective than a 25 basis point interest rate cut. The ongoing debate in the market about the Bitcoin halving cycle clashing with the economic cycle, which was delayed for two years due to the pandemic, may have found an answer. Does anyone remember the last time the Federal Reserve restarted repo operations in 2019?

The "Repo Crisis" in the autumn of 2019 is essentially the same as the current RMP (Reserve Management Purchase), the only difference being that the Federal Reserve does not want to call it QE (Quantitative Easing). But if an animal looks like a duck, walks like a duck, and quacks like a duck, then it is a duck.

In September 2019, the overnight repo rate in the U.S. suddenly soared to 10%, causing a "money crunch." Powell announced monthly purchases of $60 billion in short-term Treasury bills (T-bills) and repeatedly emphasized, "This is NOT QE." Does this formula sound familiar?

This time, the Fed announced a $40 billion purchase of short-term bonds over the next 30 days, citing the reason as "maintaining sufficient reserves." This follows the 2019 script closely, nominally fixing the pipeline, but in reality just injecting liquidity.

Based on the experience of 2019, we cannot simply conclude that Bitcoin will rise immediately, as there may be a "liquidity lag" similar to Q4 2019. The market may initially react to the hawkish comments on the "Fed pausing interest rate cuts" with a risk-off response, or it may pull back due to profit-taking at year-end.

In the end, it may take until next year, with base money injected into the banking system, along with an increase in the TGA account balance during the busy tax season in April, for the overflowing liquidity to seek high-beta assets.