The Fed is preparing to end its quantitative tightening cycle on December 1, 2025, marking the first major change in balance sheet policy in nearly two years. The central bank is expected to halt capital outflows and reinvest them in short-term government bonds as money markets face increasing stress. Traders in the cryptocurrency industry were quick to link this development to historical patterns, particularly Bitcoin’s reaction in 2019, the last time the Federal Reserve reversed its balance sheet policy. This decision came at a time of heightened liquidity sensitivity, making Bitcoin’s reaction particularly important for investors hoping for a macro-driven catalyst.
Historical parallels: Bitcoin’s 7x rise after 2019 QT
In 2019, the Fed ended QT when its balance sheet reached $3.8 trillion and turned to quantitative easing as recession fears began to grow. Over the next 18 months, the Fed expanded its balance sheet by $3.2 trillion. This surge in liquidity coincided with Bitcoin’s dramatic rise from $3,800 to $29,000, a 7.6x increase, which then accelerated during the pandemic. AshCrypto’s widely circulated post highlights this sequence, framing the upcoming QT end as a potentially similar flashpoint for a major Bitcoin cycle. While this comparison has sparked widespread debate, analysts warn that the circumstances surrounding the policy shift in 2025 are different in several key ways.
BTC’s first decline of 2019 adds context to the story
While the 7x headline grabs attention, data shows that Bitcoin did not rise immediately after the end of QT in 2019. Instead, BTC fell by around 35% in the months following the balance sheet suspension, reflecting lingering macro concerns. The explosive rally only began with the arrival of the full liquidity wave during the early quantitative easing policies. This timeline has been a key point of ongoing debate, with some analysts arguing that the 2025 transition could follow a similar two-stage pattern. Short-term volatility may emerge if the market realigns before a potential uptrend takes root.
Institutional position could shape outcomes in 2025
One of the biggest differences between 2019 and today is the existence of institutional exposure to Bitcoin. Spot ETFs are attracting billions of dollars in inflows, sovereign wealth funds are maintaining small BTC positions, and pension funds are starting to invest in digital assets. Macro strategists say this institutional foundation could cushion the type of sharp rebound seen at the end of 2019. Others argue that institutional exposure can amplify volatility if large companies rebalance based on policy news. The ultimate impact remains uncertain, making December a pivotal month for Bitcoin’s macro story.
Market expectations are divided on whether BTC will repeat history.
Bitcoin predictions will fluctuate significantly as the end of QT approaches. Bullish analysts cite a secular bull market in 2019 and expect a target of $120,000 to $180,000 if liquidity expands significantly. More cautious voices warn that inflationary pressures remain unresolved, potentially limiting the Fed’s ability to resume aggressive easing. Bitcoin’s recent stability has kept traders on guard, waiting to see whether the Dec. 1 announcement will trigger an immediate move or a delayed reaction. What remains clear is that the market has anchored its expectations on historical precedent and is poised for a widely expected reaction.
