Analysis of the Impact of the Federal Reserve's Halt on the Balance Sheet Reduction Policy on the Encryption Asset Market

Starting from December 1, 2025, the Federal Reserve will officially terminate its three-year long asset-liability sheet reduction policy. This article aims to objectively assess the potential impact of this monetary policy shift on the global liquidity environment and the encryption currency market, as well as to explore the opportunities and challenges that emerging blockchain projects may face.

1. Policy Background and Mechanism Analysis

The Federal Reserve's balance sheet reduction plan, launched in 2022, extracts liquidity from the financial system by not reinvesting up to $95 billion per month (with $60 billion in Treasury securities and $35 billion in mortgage-backed securities) in maturing assets. As of November 2025, this operation has reduced the balance sheet size by approximately $1.5 trillion, with bank reserves falling to $2.8 trillion (the lowest level since 2022).

According to the latest decision of the Federal Open Market Committee (FOMC), the balance sheet reduction process will end in December 2025, after which it will enter a period of stable balance sheet size. This move means:

• Liquidity turning point: The net outflow of market funds has ended, and the monthly liquidity environment has improved by approximately 25-35 billion USD.

• Policy signals: Creating conditions for potential future quantitative easing (QE), but Chairman Powell has clearly stated that "a rate cut in December is not yet determined," indicating that the Fed still maintains a cautious stance that is data-dependent.

• Exchange rate impact: The US dollar index may be supported by hawkish comments in the short term, but the probability of pressure increases in the medium to long term.

II. Structural Impact of the Encryption Asset Market

Short-term Outlook (1-3 months)

• Market volatility may increase significantly due to differing interpretations of policies by both bulls and bears.

• Bitcoin (BTC) is expected to maintain a consolidation pattern in the current price range, and it is necessary to observe the institutional capital inflow data.

• Mainstream assets such as Ethereum (ETH) are facing directional choices in synchronization.

Medium to long-term outlook (after 2026)

Historical experience shows that within six months after the Federal Reserve ended its balance sheet reduction in September 2019, the price of BTC rose from around $8,000 to $13,000, an increase of 62.5%. The current environment shares similarities with that of 2019:

• An improvement in the liquidity environment generally benefits high-risk assets.

• The allocation demand from institutional investors may be released as policies become clearer.

• It should be noted that the current market size and maturity are no longer comparable, and simple analogies have their limitations.

3. Emerging Project Opportunity Assessment Framework

Taking the decentralized AI computing power project (GAIB) as an example, analyze the potential logic of such assets during the liquidity inflection point period:

1. Track Fit Analysis

• Time window: The project's mainnet launch time overlaps with the effective period of the Federal Reserve's policy, which may benefit from the recovery of market risk appetite.

• Industry Growth: The compound annual growth rate of AI computing power demand is expected to exceed 60%, and the blockchain + AI integration track is in the early stages.

• Valuation considerations: If the project's market value is indeed at the level of 200 million USD (needs to be verified independently), there may be early valuation advantages, but liquidity risks should be noted.

2. Core Element Assessment

• Technology Implementation: The validation of the business model of a decentralized computing power network is key, and it is necessary to examine the authenticity and sustainability of its customer contracts.

• Team background: The core members' resumes must be cross-verified through public channels to avoid single-source risks.

• Ecological construction: The number of testnet nodes, developer growth rate, and other data need to be checked on the official on-chain data, beware of marketing exaggeration.

3. Risk Caution Reminder

• Transparency of information: As an emerging project, GAIB may not have sufficient information disclosure, and investors need to review the white paper, code repository, and audit report on their own.

• Market Volatility: The volatility of low market capitalization altcoins usually exceeds that of BTC by 3-5 times, and the risks associated with leverage and concentrated positions are extremely high.

• Regulatory uncertainty: The dual regulatory risks of AI and encryption assets have not yet become fully clear.

4. Investment Strategies and Risk Management Recommendations

Asset Allocation Principles

1. Core Position: BTC serves as the cornerstone of the portfolio, it is recommended to account for no less than 50%, leveraging its liquidity and risk-hedging properties.

2. Satellite Positioning: The allocation for emerging projects should not exceed 15-20% of total assets and must be diversified across 2-3 different sectors.

3. Participation Method: Interacting through the test network to obtain airdrops is a low-risk participation method, but time costs need to be calculated.

Risk Control Mechanism

• Stop-loss discipline: Reduce positions forcibly when a single project incurs losses of 15-20% to avoid further losses.

• Position Management: Avoid using leverage exceeding 10% of total assets.

• Continuous Verification: Regularly track hard metrics such as project GitHub updates, active on-chain address count, protocol revenue, etc.

V. Conclusion and Warning

The Federal Reserve's halt in tapering is indeed an important macro variable for the encryption currency market and may initiate a new cycle of risk asset revaluation. However, history does not simply repeat itself; the current market environment is more complex:

• There is a time lag in liquidity transmission: The transmission cycle from policy to market may take as long as 6-18 months.

• Project differentiation intensifies: only projects with real users, sustainable income, and technological innovation ability can navigate through the cycle.

• Asymmetric information risk: Early projects such as GAIB have a high difficulty in data verification, and one should be wary of "survivorship bias" propaganda.

Important statement: This article is solely an analysis of macroeconomics and the blockchain industry and does not constitute any investment advice. The cryptocurrency market carries extremely high risks and uncertainties, and investors may lose all their principal. All decisions should be based on independent research and strictly comply with the laws and regulations of the jurisdiction in which they reside. For specific project information mentioned in the text, please be sure to verify through official channels and be wary of false advertising and fraud risks. #成长值抽奖赢iPhone17和周边 #十二月降息预测 #反弹币种推荐