2025-12-27 13:22:53

The Federal Reserve is flooding the market again. Yesterday, they injected $2.5 billion through repurchase operations, bringing the total accumulated funding to over $120 billion by 2025. In simple terms, this is establishing a "normalized liquidity support" model—supporting the entire financial system and paving the way for larger-scale easing policies in the future.

What does this mean for the market?

First, all kinds of risk assets are benefiting from this wave of liquidity. Stocks, bonds, and the crypto market are continuously supported by cheap funds. As long as liquidity remains ample, these assets will have confidence.

But the issues must also be recognized. Currently, inflation has not been fully subdued, yet the liquidity injections continue, which conceals a hidden risk—the accumulation of secondary inflation and global asset price bubbles. The economic fundamentals are not yet fully stable, and excessive liquidity could actually worsen imbalances.

For cryptocurrencies like Bitcoin, a plentiful liquidity environment is generally beneficial. Scarce assets tend to perform better during easing cycles, and the narrative of Bitcoin as an "inflation hedge" will be re-emphasized by the market. As long as this liquidity cycle persists, market risk appetite will remain high.

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airdrop_whisperer

· 7h ago

Liquidity protection sounds comfortable, but the real question is—when will it end? 120 billion is just the beginning, and how many more surprises are waiting ahead?

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GasGuzzler

· 7h ago

Injecting liquidity is indeed satisfying in the short term, but this bubble will eventually burst... Bitcoin benefits from it, but I still think there will be a big pit later on.

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SilentObserver

· 7h ago

Flooding the market, flooding the market. Who still believes in this now? Inflation hasn't subsided, yet they keep throwing money in. Isn't this just drinking poison to quench thirst? Hey, speaking of which, Bitcoin is really about to take off this time. Its scarcity is right there. The bubble has been accumulating, but all the ones I was bearish on got trapped, and the longs are all making fat profits... Quite interesting. The Federal Reserve's tactics are really clever, giving you hope and then setting traps, playing it slick. Talking about liquidity support sounds nice, but in reality, they're just afraid of a market crash, so they simply prevent it from collapsing.

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ponzi_poet

· 7h ago

The Fed's move, to put it simply, is like blowing bubbles, waiting for us to pick up the tab. Spending 120 billion, politely called safeguarding, less politely delaying recession. But we're the ones watching the show. Loose liquidity is indeed beneficial for the crypto world, but that second wave of inflation... in the end, grocery shopping will empty our wallets.

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memecoin_therapy

· 8h ago

Liquidity frenzy, but the bubble is also expanding. It feels like it will burst sooner or later.

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MevHunter

· 8h ago

120 billion invested, this is essentially extending the life of the crypto market. With ample liquidity, BTC still can't rally? Pouring in real money, let's see who can hold on till the end. Inflation hasn't subsided and the easing continues? That logic is a bit strange... Cheap funds are everywhere, which risk assets won't rise? Just worried about bubbles inflating too much. The Fed's move this time is like giving us money. The story of Bitcoin as an inflation hedge will keep being told. Liquidity is king; as long as the water is sufficient, the market will hold up. Do you really think this wave can be protected forever? Maintaining high risk appetite is all it takes? The rhythm of prolonging cheap funds gives crypto assets confidence. Scarce assets thrive in a loose cycle; Bitcoin's logic is timeless. The hidden danger of a second inflation can't be stopped by anyone, but liquidity is right there.

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