Bitcoin Holds Steady as Powell Signals End of Quantitative Tightening
Bitcoin (BTC) remained near $112,600 Tuesday, largely unmoved despite Federal Reserve Chair Jerome Powell indicating that the central bank may soon conclude its quantitative tightening (QT) program. Derivatives suggest continued bearish positioning, with puts trading at a premium over calls.
Powell noted that the Fed intends to stop balance sheet runoff once reserves remain “somewhat above the level we judge consistent with ample reserve conditions,” emphasizing caution to maintain liquidity and financial stability. QT has trimmed the Fed’s balance sheet from $9 trillion to $6.6 trillion since 2022.
Markets reacted modestly, with the 10-year Treasury yield dipping to 4%, the dollar index easing to 98.75, and gold surpassing $4,200/oz. Analysts caution that the approaching end of QT does not guarantee an immediate bullish surge for crypto, as redemptions have already slowed significantly since mid-2024.
BTC’s muted reaction underscores that the Fed’s balance sheet actions are only one factor amid broader macro and market dynamics.
