Massive Bitcoin Liquidity Boost: Fed’s $13.5B Injection Fuels Powerful Rally Toward $50K

Bitcoin liquidity skyrocketed on Tuesday after the US Federal Reserve injected $13.5 billion into the banking system, the second-largest overnight infusion since the COVID-19 era. That sudden liquidity infusion pushed Bitcoin closer to the critical $50,000 price target and signaled a clear pause in the Fed’s ongoing quantitative tightening (QT).

Fed Ends QT With a Major Liquidity Boost

According to new repo data published on X by analytics firm Barchart, the Fed abruptly halted its QT phase following months of balance-sheet contraction. The last overnight repurchase (repo) operation injected $13.5 billion into the banking system, providing a huge liquidity boost to Bitcoin and other risk assets.

This injection is notable because it is the second-largest overnight liquidity boost since the early pandemic, when widespread market fear prompted massive central-bank action. Barchart even said, “Probably fine, carry on,” noting that the liquidity increase exceeded repo levels during the dot-com bubble.

A Critical Moment for Global Monetary Policy

According to earlier reporting from Cointelegraph, The Fed’s decision comes at a critical juncture for the world. Central banks throughout the world continue to ease financial conditions until 2025, but uncertainty is increasing.

Japan’s financial stability concerns have fueled speculation that the Bank of Japan may tighten policy as early as this month. Meanwhile, U.S. markets expect the Fed to drop interest rates at its December 10 meeting, with further cuts expected next year a trend that often boosts Bitcoin liquidity and risk-asset performance.

Market analysts at The Kobeissi Letter underlined that December is often one of the strongest months for US equities, reinforcing the current bullish momentum.

Crypto Diverges: Bitcoin Slips While Stocks Climb

Despite the liquidity influx and strong equities markets, Bitcoin continues to diverge, indicating a bearish trend. While the traditional market expands on its 2025 gains, the cryptocurrency market has struggled to keep up.

Bloomberg Intelligence strategist Mike McGlone warned that risk assets could be subject to a fall, with Bitcoin likely to lead the way. He noted that today’s stock market complacency is indicative of situations that usually precede major pullbacks.

Why Analysts Expect Bitcoin May Revisit $50K

To buttress his position, McGlone looked at Bitcoin’s historical valuation in comparison to gold. He contended that fair value for Bitcoin liquidity and pricing, based on long-term trends, would place Bitcoin at roughly 13 times the price of gold. At that ratio, Bitcoin would be priced somewhat higher than $50,000.

As of December 1, Bitcoin was closer to 20x gold, which is far higher than the Bloomberg Economics fair-value estimate. McGlone also noted that the S&P 500’s 120-day volatility is approaching its lowest year-end level since 2017, a signal that typically precedes market “reversions.”

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