Tomorrow Marking the End of QT: Is a Crypto Surge Imminent?

On December 1, 2025, the Federal Reserve (Fed) will officially conclude its Quantitative Tightening (QT) policy, stabilizing its balance sheet at $6.57 trillion after withdrawing $2.39 trillion from the financial system.

Key Takeaways

The Federal Reserve will end Quantitative Tightening (QT) on December 1, 2025.
Analysts anticipate a potential increase in liquidity, similar to the effects seen in 2019.
The Standing Repo Facility has transitioned to a regular liquidity provider, marking a structural shift in monetary policy.
Upcoming market implications may include a rally in major cryptocurrencies as liquidity is expected to rise substantially.
Future interest rate adjustments will rely on evolving data and economic conditions.

Bitcoin Dominance and M2 Money Supply

Analysts draw comparisons to 2019, when the last pause in QT coincided with a significant downturn in altcoins and a subsequent rise in Bitcoin. With liquidity expected to rebound and interest rates reduced to 3.75–4.00%, the cryptocurrency market is preparing for what could potentially be a bullish transition.

The End of QT — Crypto Anticipates a Liquidity Boost Similar to 2019

The Fed's decision to halt its balance sheet reduction comes at a time when bank reserves are under pressure, currently about $3 trillion, or 10% of the US GDP. The Overnight Reverse Repo facility, which previously absorbed $2.5 trillion in excess liquidity, has effectively dropped to zero, removing a critical source of financial cushioning.

In October 2025, the Secured Overnight Financing Rate surged to 4.25%, surpassing the Fed's target range, and the Standing Repo Facility recorded a single-day activation of $18.5 billion, highlighting a continuous need for liquidity.

The minutes from the Federal Open Market Committee (FOMC) meeting on October 29 noted adjustments aimed at enhancing policy effectiveness. “The Committee decided to conclude the reduction of its aggregate securities holdings on December 1,” was stated in the Fed’s announcement from that day. This signifies that QT will officially end on December 1, and the Fed will cease allowing its securities to mature without reinvestment, meaning the balance sheet will no longer contract.

While employment risks have increased, unemployment remains low and inflation is “somewhat elevated.” Analysts suggest this marks a significant transition wherein the Standing Repo Facility has shifted from an emergency tool to a regular liquidity provider, integrating the Fed into Treasury market operations. Researcher Shanaka Anslem describes this period as the “Standing Repo Era,” representing a structural shift with enduring impacts on global finance.

Historical Parallels and Their Impact on the Crypto Market

Crypto analysts are drawing direct comparisons to August 2019, when the Fed concluded QT, leading to a trough in altcoin values.

Comparison Graph The end of QT marked the lowest point for certain altcoins back in August 2019. As QT concludes on December 1, 2025, many speculate a new "Alts Supercycle" may be starting.

Although past performance is not a guarantee of future results, several indicators suggest cautious optimism. The conclusion of QT could potentially infuse up to $95 billion per month into the market, bolstering major cryptocurrencies like Bitcoin, Ethereum, Solana, and BNB. Additionally, gold's recent peak prices enhance this correlation, as Bitcoin typically lags behind gold price movements by around 12 weeks.

The Fed's upcoming FOMC meeting on December 10 is set against unusual conditions: the federal debt has surpassed $36 trillion, with annual interest costs exceeding $1 trillion. The Standing Repo Facility allows for a swift monetization of Treasury collateral, suggesting a significant shift with long-term market consequences.

Some crypto analysts speculate a quick rally may occur right after QT's termination, while others foresee a modest altseason in 2-3 months, with a larger market cycle possibly unfolding in 2027-2028.

Conclusion: The Crypto Melt-Up May Begin Now!

As the Fed prepares to conclude QT, echoing its 2019 actions, one key takeaway is clear: liquidity is on the way back.

If you're familiar with the implications this has for Bitcoin and altcoins, there's reason to be excited. December 1 marks a pivotal moment, as the Fed's liquidity change could remove barriers for risk assets, setting the stage for the crypto market's response, whether through a brief rally or the initiation of a broader Supercycle.

While the end of QT is anticipated on December 1, the Fed has made it clear that future adjustments to interest rates will be contingent on forthcoming data and evolving economic risks. This indicates the Fed's commitment to maintaining adaptable monetary policy, ready to respond with rate adjustments or alternative measures if needed. Investors should closely monitor interest rate guidance, Treasury liquidity operations, and trends in the M2 money supply in the upcoming weeks.