What does it mean? And does it support the markets and crypto? ✅️👇👇
The American Federal Reserve announced the start of purchasing U.S. Treasury bonds worth approximately 45 billion dollars, in a move aimed at enhancing liquidity within the financial system after a period of monetary tightening.
🔍 What is quantitative easing (QE)?
Quantitative easing is a monetary policy in which the central bank:
Injecting new liquidity into the markets
Buying government bonds
Lowering bond yields
Supporting financial stability and stimulating investment
And although the Federal Reserve asserts that this move is not fully traditional QE, it practically means increased liquidity in the markets.
📈 What impact will this have on the markets?
Stocks: improving with liquidity availability
Bonds: their prices rise and yields fall
The dollar: may face relative pressure
Crypto: usually benefits from increased liquidity and a higher risk appetite
🚀 What does this mean for crypto?
Historically, liquidity injection supports Bitcoin and cryptocurrencies, as investors turn to high-risk assets in search of higher returns, but the market remains volatile and is influenced by upcoming economic data.
📌 Summary:
Increased liquidity = support for markets
But the decision is not a guarantee for an upward trend; rather, it is an opportunity that requires smart risk management.
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