The New York Fed has just made a major decision: full normalization of repo operations, with the $500 billion operation cap completely removed. This is not just a numerical change, but a thorough opening of the floodgates to unlimited market liquidity.

Why is the Fed taking this step? The background makes it clear.

**The defense line is in place**
The turmoil in 2019 when overnight rates soared to 10% has not fully subsided. This time, the Fed has learned its lesson. Instead of waiting for a liquidity crisis to erupt and then firefighting, it’s better to preemptively release unlimited funds, closing off any potential gaps.

**Reality is not easy**
Ongoing tariffs until 2025 continue to stir the U.S. debt market, and the Fed officially paused its balance sheet reduction (QT) on December 1. Choosing to implement unlimited repos at this point is clearly a move to calm the volatile markets.

**Can crypto assets benefit?**
The global liquidity indicator is reflected in the performance of assets like Bitcoin and Ethereum. An easy monetary environment often pushes these highly elastic assets higher first. When overnight repo rates stay stable and market funds are abundant, risk assets tend to rally.

**Policy shift signals are clear**
The Fed has shifted from passive patching to active risk defense. "No need for ammunition, but pockets must be full" — this is the current stance. The combination of QT pause and unlimited repos opens the door to a more relaxed liquidity environment.

**Three key points to watch**

First, the performance of the overnight repo rate is crucial. Whether this number remains stable or not directly impacts the risk asset rally. Keep a close eye on when market funding costs change.

Second, inflation could bite back. U.S. inflation is still above 2%. Will large-scale liquidity influx make inflation stickier? This is a long-term hidden risk. If inflation becomes stubborn, the Fed’s policy could suddenly shift.

Finally, when choosing assets, focus on projects with solid fundamentals and high institutional recognition. Abundant liquidity is a reason to add positions, but avoid speculating on castles in the air.

This round of liquidity release is indeed a positive signal for the crypto market, but risk and opportunity have always been two sides of the same coin.