Federal Reserve May be Fueling Bitcoin With Balance Sheet Drop
By: cryptosheadlines|2025/05/09 16:30:07
0
Share
Airdrop Is Live CaryptosHeadlines Media Has Launched Its Native Token CHT. Airdrop Is Live For Everyone, Claim Instant 5000 CHT Tokens Worth Of $50 USDT. Join the Airdrop at the official website, CryptosHeadlinesToken.com The United States Federal Reserve has been reducing its balance sheet, which has sparked discussions about what this could mean for Bitcoin (BTC) and the broader financial market. Recent data shows a noticeable drop in the Fed’s holdings, raising concerns about liquidity, investor confidence, and what to expect next as interest rates were kept steady.Massive Shift In Federal Reserve Balance SheetAccording to a recent post by The Kobeissi Letter on X, the Federal Reserve’s balance sheet has declined by $17 billion over the past 30 days. It now stands at $6.7 trillion, the lowest since April 2020. This marks a total reduction of $2.3 trillion since the Fed began tightening in April 2022.This reduction represents about 48% of the $4.8 trillion in assets the Federal Reserve bought during its post-COVID response. Presently, the Fed holds $4.2 trillion in U.S. Treasuries and $2.2 trillion in mortgage-backed securities. In March, the central bank announced a slowdown in its monthly Quantitative Tightening (QT) pace. This may even get worse as it looks for alternative avenues to sustain the economy, seeing it kept interest rates unchanged this week. Notably, the bank reduced it from $60 billion to $40 billion, signaling a more cautious approach going forward.While these figures may appear technical, the more significant implication is an apparent influx of liquidity into the mainstream market. The Fed is adding money to the system, which can inflate the Dollars in circulation and hence, their value. This often leads investors to seek other stores of value, such as Bitcoin.Inflation, Money Supply and Risk AssetsIt is worth mentioning that BTC proponents are paying close attention. For example, Darin Feinstein, co-founder of Core Scientific, recently shared on his X page that Bitcoin exists as a response to what he describes as unchecked money printing by the Federal Reserve and other central banks.In his X post, Darin claimed that roughly 80% of today’s $21.6 trillion U.S. money supply was created over the past 25 years without public oversight. This ultimately reinforces the idea that Bitcoin offers a transparent, decentralized alternative.It is important to note that as the Fed tightens its policy, Bitcoin has attracted increased attention from institutions. Between May 7 and 8, U.S. Bitcoin ETFs saw $260 million inflows over the two-day period.Although less than last week’s daily highs of $400–$600 million, data from Farside Investors shows growing confidence, especially as BTC crossed the $100,000 mark this week.Impact of Unchanged Interest Rate on BitcoinAfter the May 7 FOMC meeting, the Fed resumed bond purchases as Chair Jerome Powell confirmed that interest rates would remain steady at 4.25%–4.5%.Since the meeting, altcoins have shown strength, but analysts expect Bitcoin dominance to keep soaring. The decision, which aligned with market expectations, slightly boosted both Bitcoin and altcoin prices.However, every risk asset stands to benefit if the Federal Reserve’s model of injecting liquidity into the market remain unchecked.✓ Share: Godfrey Benjamin Benjamin Godfrey is a blockchain enthusiast and journalists who relish writing about the real life applications of blockchain technology and innovations to drive general acceptance and worldwide integration of the emerging technology. His desires to educate people about cryptocurrencies inspires his contributions to renowned blockchain based media and sites. Benjamin Godfrey is a lover of sports and agriculture. Follow him on X, Linkedin Disclaimer: The presented content may include the personal opinion of the author and is subject to market condition. Do your market research before investing in cryptocurrencies. The author or the publication does not hold any responsibility for your personal financial loss.Source link
You may also like
The crypto IPO class of 2025-26 is down as much as 89%. Autopsy of a listing boom
Robinhood Chain Mining Guide: A Comprehensive Tutorial from Cross-Chain to Memecoin
BitGo CEO says single-digit percentages of bitcoin's supply are 'probably right' for large holders amid Strategy's sale
Beyond Private Keys: How to Safeguard the Security Boundaries of Web3 from Wallets, L2 to Supply Chains?
Vanguard Enters the Market, Opening a New Crypto Gateway for 50 Million Traditional Investors
Why the OUSD Alliance of 150 Companies Still Cannot Shake USDT and USDC?
Citigroup Analysis: Is There Still 47% Upside for Nvidia? Can Rubin and CPO Deliver?
WEEX API Fast Connect: Turn Every Sign-In Into a Live Trader in Under 10 Seconds
WEEX API Fast Connect is a one-click OAuth authorization system that lets your users link their WEEX account without ever touching an API key. Frictionless onboarding, faster conversions, higher retention — built for WEEX Broker partners.
Bitcoin's dwindling exchange reserves don't pack the same bullish punch anymore
From Le Mans to the Rollercoaster: Carl Moon Takes On Portimão
Crypto world renowned KOL and racing driver Carl Moon, backed by WEEX, heads to the Ferrari Challenge Portugal round at the Algarve International Circuit, July 16–19, fresh off a podium finish at Le Mans. Here's why this race is one to watch.
Fast execution. Split-second accuracy. Security that never blinks. That's WEEX — and that's exactly how Carl races.
The Downfall of a Public Company: A $1.46 Billion Bet on WLFI, $540 Million Went to the Trump Family
Dragonfly Partner: BTC is Intergenerational Wealth, Optimistic About ETH and SOL
Goldman Sachs Calls to Go Long on Chinese AI: $4 Trillion Market Value Behind, Global Funds Only Allocated 1.2%
The New Landscape of Cryptocurrency in Europe: Why Germany Takes Center Stage?
Robinhood vs xStocks: Stock Tokenization Shouldn't Just Focus on Ticker On-Chain
Nexo launches crypto card in Argentina as Latin America push grows
Bank of America: Nvidia's Forward P/E Falls to 7-Year Low, Market Paying for a Non-Existent Risk
Q2 2026 CEX Trading Data Review: Who's Slacking Off? Who's Inflating Their OI?
The crypto IPO class of 2025-26 is down as much as 89%. Autopsy of a listing boom
Robinhood Chain Mining Guide: A Comprehensive Tutorial from Cross-Chain to Memecoin
BitGo CEO says single-digit percentages of bitcoin's supply are 'probably right' for large holders amid Strategy's sale
Beyond Private Keys: How to Safeguard the Security Boundaries of Web3 from Wallets, L2 to Supply Chains?
Vanguard Enters the Market, Opening a New Crypto Gateway for 50 Million Traditional Investors
Why the OUSD Alliance of 150 Companies Still Cannot Shake USDT and USDC?
Customer Support:@weikecs
Business Cooperation:@weikecs
Quant Trading & MM:bd@weex.com
VIP Program:support@weex.com


