With the Fed's tapering coming to an end this time, does the market really think liquidity is coming back? Don't be too quick to be optimistic— the actual situation may be much more complicated than imagined.

The CEO of a well-known crypto analytics firm recently poured cold water on the market: although quantitative tightening was officially announced to have ended on December 1 last year, a substantive improvement in the balance sheet? It may take until early 2026 to see results. The reason is simple - the settlement of maturing government bonds has a lagging cycle, and this thing can't just stop immediately when it's said to stop. A look at history shows that it was the same in 2019; after the policy was announced to have ended, the balance sheet still had to continue shrinking for several months before it could truly hit the bottom.

On the other hand, the betting on the next Fed chair has already begun to heat up. Prediction platforms show that the current Director of the White House National Economic Council, Hassett, saw his support rate soar from 55% to 78% within a week, and on another platform, he also has a leading advantage of 71%, basically leaving other candidates far behind.

These two things are interesting when viewed together: if the balance sheet improvement is really going to be delayed until 2026, will the liquidity turning point that the crypto market is counting on this year fall through? And if Hassett comes to power, which direction will his policy preferences lean towards? After all, a change in the Fed chair often means a subtle adjustment in the tone of monetary policy.

What the market lacks the most right now is not news, but an accurate judgment of these variables. Do you think the liquidity expectations can hold up in the second half of this year?