Gate Daily (January 20): Federal Reserve plans to buy $55 billion in U.S. bonds; U.S. banks forecast liquidity increasing by $600 billion by 2026

Bitcoin (BTC) remains in a sluggish trend, currently around $92,520 as of January 20. The Federal Reserve plans to purchase $55 billion worth of US Treasury bonds over the next three weeks, an action industry insiders say will significantly boost risk assets such as US stocks and cryptocurrencies. US banks forecast that liquidity will increase by $600 billion by 2026.

Macro Events & Crypto Hotspots

1. The Federal Reserve’s Open Market Operations Department announced the largest bond purchase plan starting January 20, with an initial purchase of $8.3 billion in 1-4 month Treasury bonds, followed by a total purchase of $55.36 billion before early February. Industry figures like Ash Crypto and Crypto Rover say this will greatly boost risk assets and link it to the Fed and Trump administration’s forecast of injecting $600 billion in liquidity this year. While traders cheer for a potential super cycle, experts point out these are routine reserve management tools, not large-scale stimulus like previous quantitative easing, as quantitative tightening will end by the end of 2025.

2. US banks forecast liquidity will increase by $600 billion by 2026. A research report by Michael Hartnett indicates that increased issuance of government bonds, purchases of mortgage-backed securities, and reinvestments could support approximately $0.6 trillion in capital. Some industry insiders refer to this as quantitative easing and predict Bitcoin and stock prices will rise, while others, like crypto giant Titan of Crypto, clarify that this is just liquidity support, not an official asset-liability expansion. This enthusiasm reflects expectations of past liquidity-driven bull markets. Currently, Bitcoin traders are closely watching the Fed’s moves and fiscal policy directions.

News Highlights

1. Pump.fun establishes an investment division Pump Fund, launching a hackathon with a prize pool of $3 million.

2. China’s 1-year and 5-year LPR remain unchanged.

3. Bermuda announces plans to create the world’s first fully on-chain national economic system.

4. Zama mainnet launches staking functionality, with 18 operational nodes participating.

5. Bhutan’s sovereign wealth fund Druk Holdings’ related address leverages Aave to go long ETH with added leverage.

6. Bitmine adds 86,848 ETH to staking, worth approximately $279.4 million.

7. Magic Eden: Starting February 1, 15% of all revenue will be directly injected into the ME token ecosystem.

8. OpenAI plans to launch its first hardware device in the second half of 2026.

9. China’s Central Political and Legal Affairs Work Conference: Conducts forward-looking research on virtual currencies and other new topics, proactively proposing legislative suggestions.

Market Trends

1. Latest Bitcoin news: $BTC remains in a sluggish trend, currently around $92,520, with $149.5 billion in liquidation over the past 24 hours, mainly long positions.

2. US stocks were closed on January 19 for Martin Luther King Jr. Day.

(Source: Gate)

3. According to Gate BTC/USDT liquidation map, with the current price at $92,667.50 USDT, if it drops to around $92,063, the total long liquidation exceeds $146 million; if it rises to around $93,505, the total short liquidation exceeds $188 million. Short liquidations are higher than longs, so it’s advisable to control leverage reasonably to avoid large-scale liquidations during market fluctuations.

(Source: Coinglass)

4. In the past 24 hours, spot inflow of BTC was $1.74 billion, outflow was $1.78 billion, net outflow $0.4 billion.

(Source: Coinglass)

5. In the past 24 hours, net outflows in contracts trading for $XRP, $RIVER, $ADA, $DUSK, $BTC , among others, indicating trading opportunities.

X Key Opinion Leader Insights

Phyrex Ni (@Phyrex_Ni): “Because US stock markets were closed on Monday, the reaction was not very strong. Asian investors in futures markets are already a bit impatient, with a decline of about 1% on Monday. In the US, tensions over Greenland tariffs continue, with Trump insisting that unless Greenland is given, tariffs will be increased. This has led one of the three major rating agencies, Fitch, to issue warnings about the geopolitical risks of Greenland tariff threats.”

“On Tuesday, after US stock markets open, there may be further panic. We’ll first observe Asian investors’ reactions in the morning, then European and American investors’ reactions in the evening. Given the current escalation of tensions, risk markets may not be very optimistic. The biggest hope now is whether the US Supreme Court will revoke Trump’s tariffs under IEEPA. If revoked, the issue is settled. But if Trump enforces these tariffs, not only will US inflation be affected, but Europe’s economy could also decline, and the US itself won’t be spared. The economic cost for the US domestic economy would be greater. If tariffs increase further, American households’ financial burdens will also grow.”

“Still hoping for rate cuts in 2026? It’s unlikely anyone sitting as Fed Chair would dare to cut rates easily.”

“Looking at Bitcoin data, the Monday turnover rate was quite high due to the holiday. Combining data, it’s likely that Asian institutions are not optimistic about risk markets, showing signs of selling off. However, this selling is mainly from short-term investors, concentrated around a cost basis of $95,000. Other price levels’ selling can be ignored.”

“The current chip structure remains normal, with no signs of panic selling. Most investors are still calm, but after US stock markets open on Tuesday, a new wave of selling may occur.”

Today’s Preview

1. Germany December Producer Price Index (MoM), previous value 0.0%

2. UK November Unemployment Rate, previous value 4.39%

3. UK 3-month ILO Unemployment Rate up to November, previous value 5.1%

4. Germany January ZEW Economic Sentiment Index, previous value 45.8