The truth about the crypto market after the US QT: a brief rebound or the beginning of a bull market?

In early December, the U.S. Federal Reserve officially announced the end of its quantitative tightening (QT) policy, a news event that immediately triggered a collective response in the crypto market. On the same day, BTC surged approximately 8%, regaining the $93,000 level, while ETH rose nearly 10%, returning to the $3,000 mark. Other mainstream cryptocurrencies also experienced a wave of gains, with competitors like SUI and SOL seeing astonishing increases. The market sentiment shifted from silence to enthusiasm, as investors began to anticipate a new wave of liquidity influx.

However, internal market voices are not unified. Many industry insiders suggest that this sharp rally might merely be a technical rebound within a bear market, not the start of a new trend. So, can the policy adjustment in the U.S. truly bring a substantive turning point to the crypto market?

Lessons from History: How Did the End of QT in 2019 Play Out?

To understand the current situation, let’s revisit the last time QT ended. August 1, 2019, more than six years ago.

At that time, the crypto market had just experienced a peak in a small bull run. After a brutal crash at the end of 2018, BTC climbed to around $13,970. Although still below the previous all-time high of $19,000, the market was optimistic, believing a new bull cycle was about to begin.

On July 31, 2019, the Federal Open Market Committee (FOMC) announced that it would officially end its QT plan the next day. At that moment, Bitcoin had just undergone a significant correction of nearly 30%, falling to around $9,400. After the Fed announced the halt to QT, BTC briefly rebounded 6% on July 31, then regained momentum over the next few days to reach $12,000 again.

But this upward momentum didn’t last long. On September 26, the crypto market experienced a new crash, with prices dropping to as low as $7,800. Although there was a brief rebound in October driven by policy positives, the market soon fell back into a bear oscillation. It wasn’t until the March 12, 2020 “COVID-19 event” that the crypto market fully collapsed.

Meanwhile, the U.S. stock market, represented by the Nasdaq index, showed a completely different trend. From August 2019 to February 2020, the Nasdaq kept rising, setting new highs until it hit a record of 9,838 points in February 2020. Subsequently, in mid-February, it entered a crash along with the crypto market.

In this cycle, the crypto market did see a brief boost after the end of QT, but before the Federal Reserve launched “unlimited QE” (March 15, 2020), the overall trend remained volatile and downward.

Tenfold Scale, Stabilized Trend: The Fundamental Difference Between 2025 and 2019

So, what distinguishes today from six years ago?

In December 2025, after Bitcoin hit a new all-time high of 126.08K in October, it experienced a sharp correction lasting nearly two months, with a maximum decline of over 36%. On the surface, this cycle phase resembles 2019—a period of turbulence after a bull market. But the deeper differences are decisive.

The current crypto market has gained widespread recognition from traditional finance. Major listed companies are adopting crypto asset treasury strategies, and crypto ETFs have become routine—things that were still novel in 2019. More critically, the entire market size has grown over tenfold since 2019, with market participants shifting from retail dominance to institutional dominance.

In terms of volatility, the differences are even more pronounced. Comparing the performance of the two years before the end of QT in 2019 with the two years before 2025, using 100 as a baseline, we find an interesting phenomenon: the gains before the two QT cycles are surprisingly similar—142% in 2019 and 131% in 2025, both roughly 2.4 times the initial value.

However, the trajectory is vastly different. In the recent two-year cycle, Bitcoin’s performance has been notably more stable, no longer exhibiting the extreme volatility of the previous cycle.

Another key shift is the increased correlation between the crypto market and the U.S. stock market. Currently, the correlation coefficient stabilizes between 0.4 and 0.6, indicating a strong positive relationship, whereas in 2019, Bitcoin’s correlation with the S&P 500 was mostly between -0.4 and 0.2 (almost uncorrelated or even negatively correlated).

What does this imply? The movement directions of cryptocurrencies and U.S. stocks are now highly synchronized. However, in a stock-dominated environment, investment capital tends to favor the more certain U.S. tech stocks. For example, after the Fed announced the end of QT in early December, the Nasdaq also experienced a correction but had already begun to recover, approaching its previous high of 24,019 points. In contrast, Bitcoin’s performance was weaker—experiencing larger declines and more limited rebounds. Of course, this reflects the high volatility of crypto assets as risk assets, but from a broader perspective, the crypto market increasingly exhibits characteristics of U.S. tech stocks.

Quantitative Easing Is the True Catalyst; End of QT Is Merely a Stopgap

Bitcoin follows the U.S. stock market, and altcoins follow Bitcoin—this “follower” role makes the crypto market highly sensitive to macroeconomic changes. Since it is passive, relying solely on policies like the end of QT as a “stop the bleeding” measure is unlikely to support an independent rally. The market’s real desire is for genuine “blood transfusions”—quantitative easing (QE).

Historical data supports this view. After the last QT cycle, the crypto market experienced a brief rebound but remained volatile and downward trending overall. It wasn’t until the Federal Reserve announced “unlimited QE” on March 15, 2020, that the crypto market truly began to ascend alongside the stock market.

Although QT has now ended, the Fed has not yet officially entered a QE phase. However, global major financial institutions are increasingly optimistic about the U.S. economy and the Fed’s policy stance. Goldman Sachs, Bank of America, and others expect the Fed to continue cutting rates into 2026, with some predicting at least two rate cuts in 2026. Deutsche Bank and others forecast that the Fed might restart QE as early as the first quarter of 2026.

Nevertheless, these expectations carry the risk of being priced in prematurely. Goldman Sachs’ November outlook explicitly states, “Markets have priced in expectations; caution is needed for downside risks.” This reminds us that the marginal easing expectations in U.S. policy are already somewhat reflected in asset prices.

The Rise of AI Diverts Attention, Crypto Market’s Spotlight Is Fading

Another significant change is that even if quantitative easing proceeds as expected, cryptocurrencies may not be the biggest winners. The rise of AI is significantly compressing the attention and capital flow into the crypto market.

This trend is especially evident in the mining industry. Data from November shows that among the top ten crypto mining companies by hash rate, seven have already generated revenue through AI or high-performance computing projects, with the remaining three planning to follow suit. This reflects that even seasoned crypto industry players are actively seeking AI-related opportunities.

Conclusion: Cautiously Optimistic, Beware of Traps

Combining historical experience with current realities, the end of U.S. QT seems insufficient to herald a new bullish cycle. The real turning point is more likely to be the initiation of quantitative easing.

But even if easing policies are implemented as expected, the crypto market faces challenges in replicating the tenfold growth of the past—its scale is already ten times that of 2019, and its trend has become more stable, leaving less room for excessive growth. More importantly, we must acknowledge that, on today’s stage, cryptocurrencies are no longer the brightest stars; AI is the true focus.

In this broader environment, excessive optimism or pessimism is inappropriate. The policy shift in the U.S. indeed injects new variables into the market, but whether it can translate into substantial gains for crypto assets remains to be seen over time.