Fed to Conclude QT: Potential for a Multi-Year Altcoin Rally Like 2019-2022?

As the Federal Reserve prepares to end its quantitative tightening (QT) program on December 1, 2024, significant implications for the cryptocurrency sector may lie ahead.

Key Takeaways:

The Federal Reserve's end of quantitative tightening on December 1, 2024, could influence the crypto market significantly, but effects may not be seen until early 2026.
Historical patterns reveal a strong correlation between the Fed's liquidity policy and altcoin performance, with past non-QT periods resulting in extended altcoin rallies.
Critical technical indicators, such as the ALT/BTC ratio, suggest a potential upcoming altcoin season.
Market reactions may experience delays, highlighting the importance of patience for crypto traders as the macroeconomic landscape evolves.

Experts caution that the effects of this shift may not be immediate. The expansion of the Fed's balance sheet could experience delays, possibly extending until early 2026 due to treasury settlement lags, similar to patterns observed in former cycles.

The Connection Between Fed Policy and Altcoin Performance

The Federal Reserve's monetary policy has a growing impact on cryptocurrency markets. Historically, periods without QT have often led to considerable strength in altcoins compared to Bitcoin, resulting in multi-year rallies and changing the market landscape.

These shifts indicate a clear link between liquidity policy and the performance of cryptocurrencies. Analyst Matthew Hyland has identified historical trends demonstrating that phases without QT have typically been followed by sustained altcoin rallies lasting between 29 and 42 months, as shown by the OTHERS.D/BTC.D ratio.

Hyland highlights two key periods: 2014-2017 and 2019-2022. During both times, the absence of QT supported altcoins, resulting in price increases over 42 months and 29 months, respectively.

“Altcoins historically outperform Bitcoin when QT is not active. They experienced a 42-month and a 29-month uptrend during the 2014-2017 and 2019-2022 periods, respectively. Given the strong correlation with the Fed’s balance sheet, it’s likely that altcoins will outperform Bitcoin for several years ahead,” Hyland explained.

The OTHERS.D/BTC.D ratio, which compares altcoin market dominance to Bitcoin, has increased as monetary conditions improved, fostering a greater appetite for risk.

![OTHERS.D/BTC.D ratio demonstrates historical altcoin outperformance during non-QT periods. Source: Matthew Hyland on X](Insert Image Link Here)

The Fed's policies have closely followed these trends. A supportive stance between 2014 and 2017 fostered significant altcoin growth. Similarly, after QT concluded in August 2019, another rally in altcoins began and continued through 2022, suggesting that the Fed's liquidity policy is crucial to the performance of crypto risk assets.

![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!](Insert Image Link Here)

Hyland pointed out that the current balance sheet, which sits around $6.55 trillion and is stabilizing post-QT, fuels optimism for an extended period of altcoin outperformance relative to Bitcoin.

Key Technical Levels May Indicate Beginning of Altcoin Season

Technical analysis reveals that the ALT/BTC trading pair has historically reached a low point at 0.25 following the conclusion of QT. This threshold is seen as a significant indicator that could hint at the start of a potential altcoin rally and may signal the next phase of upward momentum.

![ALT/BTC pair historically bottoms at 0.25 when QT concludes, signaling potential rally starts. Source: TradingView](Insert Image Link Here)

Currently, the ALT/BTC ratio is 0.36, which is above this crucial support level. If this ratio approaches 0.25, it may suggest a typical point of capitulation that precedes strong altcoin performance.

This 0.25 line is technically and psychologically significant, often representing a point where altcoins typically regain upward momentum against Bitcoin.

Historical data indicates that when Bitcoin's dominance decreases, capital often flows into alternative cryptocurrencies. Research from Coinbase in August 2025 noted a drop in Bitcoin's dominance from 65% in May to approximately 59% by August, pointing to early capital movement favoring altcoins— a phenomenon indicative of an "altcoin season."

Delays in Balance Sheet Expansion May Affect Market Impact

While QT has officially ended, immediate effects on the market may not be felt right away. Insights from the 2019 experience reveal that treasury settlement lags can delay noticeable balance sheet expansion — and subsequently, affect crypto market dynamics.

Benjamin Cowen remarked on operational factors at play. In 2019, although QT concluded in August, signs of balance sheet growth lagged as Treasury maturities took longer to settle. This indicates that policy changes may take time before they influence financial markets, including cryptocurrencies.

“Ending QT on December 1 doesn’t mean the balance sheet will start expanding right away; it might take until early 2026 to see those effects,” Cowen noted.

Understanding these operational dynamics is crucial for market timing. Mechanisms like treasury settlements and reserve management can postpone balance sheet expansion, leading to uncertain conditions for traders waiting for clear policy effects. There may be continued volatility during this period.

The Fed’s research highlights these complexities. Shifts in the Treasury General Account and settlement schedules can distort short-term balance sheet readings.

The experience of August 2019 teaches that patience is key before clear market trends emerge, likely not until 2025 or 2026.

Despite near-term uncertainties, the outlook for altcoin markets remains positive. Historical trends suggest that once Fed-driven liquidity expansion becomes visible, altcoins generally reap the benefits.