Will the End of Quantitative Tightening Reverse the Crypto Down Trend?

American Bitcoin Corp, a mining firm co-founded by Eric Trump, experienced a dramatic 40% drop in its stock price, falling to $1.80 on December 2, 2025, due to the expiration of a lockup period on pre-merger private placement shares. This significant decline highlights the volatility inherent in cryptocurrency investments.

Macro strategist Alex Krüger has linked Bitcoin's future performance to anticipated changes at the Federal Reserve in 2026, suggesting that a shift towards a more dovish monetary policy under a Trump-aligned central bank could significantly impact asset returns, particularly for Bitcoin. Krüger posits that the current market is underestimating the potential for a substantial drop in US interest rates.

Strategy is facing a potential removal from MSCI indexes, which could lead to billions in outflows as MSCI reviews its classifications. This situation has arisen amid ongoing volatility in the cryptocurrency market, particularly affecting companies heavily invested in digital assets.

The cryptocurrency market has seen a significant resurgence, with Bitcoin (BTC) surpassing $93,000 and Ethereum (ETH) reclaiming the $3,000 mark, coinciding with the anticipation of the Fusaka upgrade. This marks a notable recovery following a period of volatility and price declines in the crypto space.

Kevin O’Leary, a prominent entrepreneur and investor, has expressed skepticism regarding the potential impact of a Federal Reserve rate cut in December on Bitcoin prices, suggesting that persistent inflation may keep monetary policy tight and Bitcoin is likely to remain within 5% of its current price range.

The Federal Reserve has officially ended its quantitative tightening (QT) program as of December 1, maintaining its balance sheet at $6.57 trillion. This decision marks a significant shift in U.S. monetary policy, which is expected to have substantial implications for Bitcoin and the broader cryptocurrency markets.

BTC USD has recently experienced significant volatility, with nearly $1 billion liquidated from the crypto market, predominantly from long positions. This fluctuation raises questions about market sentiment, suggesting a potential bullish outlook despite the recent downturn.

Goldman Sachs has announced a $2 billion acquisition of Innovator Capital Management, marking a significant step towards institutional acceptance of digital assets and expanding its footprint in the cryptocurrency ETF market. This acquisition is seen as a bold move amid ongoing volatility in the crypto sector.