Experts Predict Fed Won’t Implement QE Despite Market Instability
By: bitcoin ethereum news|2025/05/02 15:00:05
0
Share
Despite the broader market downturn, driven by significant uncertainty and recession fears, the Federal Reserve likely doesn’t see the situation as severe enough to justify implementing a quantitative easing strategy. To understand when the Federal Reserve might use quantitative easing to address greater market instability and how that could affect Bitcoin’s price, BeInCrypto interviewed experts from 22V Research, CryptoQuant, and BingX. Navigating 2025 Market Headwinds Markets have faced significant challenges since the start of 2025. Concerns ranging from a potential tariff war between the US and other major global economies to slowing economic growth, recession fears, and rising inflation have left investors riddled with uncertainty. Two days ago, the US stock market recorded its worst initial 100 days of any presidential term since Gerald Ford took office in 1974. The crypto market did not go unharmed in the process. Despite a subsequent price recovery, Bitcoin’s value dipped below $77,000 in the past month, while altcoins suffered even more significant losses. Trump’s 90-day pause on most tariffs calmed investors and restored market confidence. However, what will happen when this period ends remains a significant stress point. At the same time, concerns about inflation and economic stagnation are also intensifying these fears. “Due to the uncertainty this change brings, [investors] have lost faith in what the future holds. Investors need to have a vision of the future and right now it is very murky causing them to sit back and wait in a similar way to businesses having trouble making decisions about the future,” Jordi Visser, Head of AI Macro Nexus Research at 22 V Research, told BeInCrypto. Heads are now turning to the Federal Reserve to see what strategies it may consider to soothe uncertainty and economic duress. Some analysts predict a shift toward quantitative easing (QE). QE is a tool central banks use to inject liquidity into the financial system during periods of particular economic uncertainty. In implementing this measure, banks purchase assets, typically government bonds, from commercial banks and other financial institutions in the open market. They hope to lower long-term interest rates and encourage consumer spending by doing so. The effects of QE can significantly influence the price of Bitcoin in the process, primarily through its impact on market liquidity, investor sentiment, and the perceived value of fiat currencies. The coronavirus pandemic served as a key example of this dynamic. In March 2020, as the pandemic triggered a global financial crisis, Bitcoin’s price experienced a dramatic crash, plummeting from around $8,000 to a low of $3,800. However, the Fed’s subsequent implementation of aggressive QE measures coincided with a significant recovery and eventual surge in Bitcoin’s price. “In the most succinct way, quantitative easing (QE) served as a catalyst by increasing liquidity, lowering yields, and creating a risk-on environment, all of which enhanced Bitcoin’s attractiveness as both a hedge and a speculative asset. The surge in 2020 established a precedent for how shifts in macroeconomic policy can influence cryptocurrency markets, a trend that remains popular with renewed QE speculation in 2025,” Vivien Lin, Chief Product Officer at BingX, told BeInCrypto. With access to lower interest rates and increased liquidity, investors with a risk appetite felt more inclined to buy the asset. Investors commonly look for alternative assets to fiat currency when facing heightened uncertainty. The Role of Bitcoin as an Alternative Asset Recent volatility and geopolitical pressures have spiked investor interest in cryptocurrencies. “Institutional investors are taking advantage of market volatility by increasing their allocations to cryptocurrencies and utilizing digital assets as a hedge against geopolitical risks. Meanwhile, retail investors are maintaining a steady approach, emphasizing long-term strategies and selective rebalancing,” Lin explained. Lin added that institutions, in particular, are increasingly considering cryptocurrencies as a key component of their portfolios. Michael Saylor’s Strategy has become an aggressive Bitcoin accumulator, while other corporations like GameStop and Fold Holdings have recently begun diversifying their treasuries by incorporating Bitcoin. Julio Moreno, Head of Research at CryptoQuant, has recently noticed a similar trend among large holders. “We definitely have seen large holders accumulating Bitcoin since prices declined below $90,000 at the end of February. The total balance of large Bitcoin holders (holding 1,000-10,000 Bitcoin) has increased from 3.39 million to 3.49 million Bitcoin since late February, an increase of ~110,000 Bitcoin. This indicates that large investors have been purchasing Bitcoin as prices declined,” Moreno told BeInCrypto. With Bitcoin’s already apparent appreciation as an alternative asset, better economic conditions provided by the Fed’s QE strategy could bode favorably for its price. The Bullish Case for Bitcoin Just last month, Arthur Hayes, former CEO of BitMEX, predicted that Bitcoin could reach $250,000 by the end of 2025 if the Fed shifts to QE to support markets. Visser echoed this view, suggesting that implementing QE now would further increase interest in Bitcoin. “Bitcoin has three components to it. The first is that it is outside the fiat system so as people doubt what is happening to the current financial system, investors are looking outside for possible investments that could be a store of value during the turbulence. The second is like fiat risk assets, it historically benefits during periods where global liquidity increases which would occur if QE was needed. Finally, it is a digital asset and part of the growth of the digital economy. Stablecoins continue to see volume growth and support from the US government which helps the network effects for Bitcoin,” he explained. However, experts admit that the current economic situation isn’t sufficiently grave to qualify for a QE adoption by the Fed. Why QE Isn’t Imminent Moreno explained that the current Bitcoin volatility, although higher than in previous weeks, is still far from other periods when the market faced uncertainty. “For example, the intra-week Bitcoin price volatility spiked to 72% on the COVID market crash in March 2020. This same metric increased to 49% after the Terra-Luna crash in May 2022, and to 31% due to the collapse of FTX in November of that same year. More recently, in March 2023, the volatility also reached 31% due to the SVB bank run. In comparison, the volatility has ranged between 8% and 21% since February, when the announcements about the US tariffs started to be more recurrent,” he detailed. Visser agreed, adding that: “For [QE] to occur, I think we would need to either see a significant drop off in economic activity or more intense disruptions in the US bond market.” According to Lin, it’s not a good time to inject liquidity, given that the Fed recently announced a downgraded GDP Growth forecast for the American economy. “The Fed’s recent downgrade of 2025 GDP growth to 1.7% from 2.1% and heightened inflation expectations suggest a cautious approach should be taken. However, Chair Powell has emphasized flexibility in these assessments, noting that ‘policy is not on a predetermined path,’” Lin explained. This adaptable approach allows for QE to be implemented in the future should conditions worsen. How Could a QE Strategy Affect Institutional Adoption? Though the current state of the American economy doesn’t require the Fed to adopt a QE strategy, it remains a valid option should conditions worsen during the remainder of Trump’s presidency. “While immediate quantitative easing remains unlikely, a combination of labor market fragility, deflationary signals, and liquidity strains could override the current QT trajectory, especially if geopolitical risks materialize into broader economic fallout,” Lin said. Beyond affecting prices, another round of QE could significantly influence institutional adoption, regulatory scrutiny, and the general perception of Bitcoin and other cryptocurrencies. “Quantitative easing (QE) could serve as a means for cryptocurrency to mature further, integrating it into global finance while testing its decentralized foundations. Institutions would use this increased liquidity to develop infrastructure, while regulators would focus on implementing systemic safeguards. As a result, Bitcoin’s identity would shift from being viewed merely as a speculative asset to becoming a key component of macroeconomic strategies,” Lin concluded. Ideally, the economic situation will not require such intervention. However, should QE become necessary, it could create positive momentum for the digital asset industry. Disclaimer Following the Trust Project guidelines, this feature article presents opinions and perspectives from industry experts or individuals. BeInCrypto is dedicated to transparent reporting, but the views expressed in this article do not necessarily reflect those of BeInCrypto or its staff. Readers should verify information independently and consult with a professional before making decisions based on this content. Please note that our Terms and Conditions, Privacy Policy, and Disclaimers have been updated. Source: https://beincrypto.com/quantitative-easing-unnecessary-say-experts-amid-current-market-turmoil/
You may also like
From ByteDance to Financial Freedom: How did "Byte Brother" Leto develop his investment judgment skills to achieve a turnaround of 30 million?
Speak with data and signals, validate judgments with A/B tests, and seek asymmetric returns with limited risk exposure.
Trump, the best stock trader among U.S. presidents
Trump has almost turned the presidency into a business and maximized the conversion of presidential influence into commercial profits.
OUSD False Cooperation Controversy? The Credit Game of Stablecoins and Endorsements by Giants
The success of stablecoins does not rely on rallying a group of alliance members for marketing, but rather on whether they have real use cases and genuine users.
Q-Day Countdown: Will Quantum Computing End Cryptocurrency?
In the face of dormant coins being plundered by quantum computing power, should we firmly uphold the unalterable bottom line of "code is law," or should we enforce a soft fork to freeze legacy assets?
Selling coins despite a loss of 55 million dollars, the faith in Strategy has reached the interest payment date
The moment faith was securitized, Bitcoin became a bill.
The cryptocurrency industry has become a traditional industry
For entrepreneurs and retail investors still in this industry, they should either embrace the current changes or explore the next unpredictable field in cryptocurrency.
Chip frenzy cooling down? Morgan Stanley's Wilson: Funds are shifting towards AI supercomputing giants like Microsoft and Amazon
Morgan Stanley's chief equity strategist Wilson pointed out that the momentum in the semiconductor sector is waning, with the Philadelphia Semiconductor Index having dropped nearly 14% from its peak. Funds are shifting towards AI supercomputing giants like Microsoft, Amazon, and Meta, as well as sec...
$10,000 in TRUMP Token vs. $10,000 in Nasdaq: The "Trump Trade" That Actually Worked in 2026
TRUMP Token lost more than 96% after its launch, while Nasdaq stocks and NVIDIA delivered strong gains. Compare what happened to a $10,000 investment and explore why asset fundamentals matter more than market hype.
Morning Report | Vitalik outlines Ethereum's long-term roadmap, Lean Ethereum will become the third major iteration; SK Hynix seeks to attract more AI investors by listing in the U.S
July 5 Market Important Events Overview
The impact of OUSD on Circle, Tether, and Paxos: not a single negative factor, but a more complex reshaping of competition
OUSD will not be the last new competitor; Circle needs to respond more actively in terms of products, distribution, and ecosystem collaboration.
Li Feifei's latest long article: When video generation, robots, and NVIDIA all claim to be world models, we need a taxonomy
Language gives machines a way to talk about the world. The world model is the means by which machines ultimately understand, imagine, reason, and interact with it.
Blaming the desolation of the cryptocurrency world on the rise of AI is a form of intellectual laziness
The emergence of giants signifies a mature business model. Although it will reduce speculative space, there is also enough room for error, allowing for the continuous emergence of new forces.
Strategy Founder: The Next 10 Years of Bitcoin
In the next decade, the biggest evolution of Bitcoin is precisely "responding to change with invariance." The four-year cycle is giving way to capital flows such as ETFs, corporate and sovereign reserves, and bank credit, while digital credit and digital currency will grow layer upon layer on top of...
Forbes Special Report: Stablecoin cross-border payments are faster now, but not cheaper yet
Cross-border payments using stablecoins are rapidly expanding, bringing speed and accessibility, but due to insufficient institutional liquidity, they have not yet delivered on their promised cost savings. The technology has been validated, and regulations are improving, but the industry has not yet...
A valuation of 8 billion dollars, doubling in 8 months! What makes the crypto-friendly bank Erebor Bank stand out?
Erebor is a high-profile experiment taking place at the intersection of banking, cryptocurrency, and industrial policy.
340 billion valuation: Li Yanhong's largest IPO, a seat in Kunlunxin's shares is hard to come by
As a core asset in Baidu's AI landscape, Kunlun Chip is expected to exceed Baidu's market value after going public, becoming an important bargaining chip in its turnaround battle.
Stablecoins are the "royalists" of the crypto world: Open USD brings the old currency system into play
The emergence of Open USD has shifted the competition for stablecoins from the market struggle of crypto startups to a battle for infrastructure involving traditional finance, payment networks, technology platforms, and public chain ecosystems.
Cape Verde 2-3 Argentina: The Underdog Team That Stunned the World in Defeat
Cape Verde's run ended in a 3-2 defeat to Argentina, but their journey — three unbeaten draws, one heroic goalkeeper, and a fight that pushed the defending champions to the brink — is the kind of story markets recognize too: small caps can rattle blue chips long before anyone expects it.
From ByteDance to Financial Freedom: How did "Byte Brother" Leto develop his investment judgment skills to achieve a turnaround of 30 million?
Speak with data and signals, validate judgments with A/B tests, and seek asymmetric returns with limited risk exposure.
Trump, the best stock trader among U.S. presidents
Trump has almost turned the presidency into a business and maximized the conversion of presidential influence into commercial profits.
OUSD False Cooperation Controversy? The Credit Game of Stablecoins and Endorsements by Giants
The success of stablecoins does not rely on rallying a group of alliance members for marketing, but rather on whether they have real use cases and genuine users.
Q-Day Countdown: Will Quantum Computing End Cryptocurrency?
In the face of dormant coins being plundered by quantum computing power, should we firmly uphold the unalterable bottom line of "code is law," or should we enforce a soft fork to freeze legacy assets?
Selling coins despite a loss of 55 million dollars, the faith in Strategy has reached the interest payment date
The moment faith was securitized, Bitcoin became a bill.
The cryptocurrency industry has become a traditional industry
For entrepreneurs and retail investors still in this industry, they should either embrace the current changes or explore the next unpredictable field in cryptocurrency.
Customer Support:@weikecs
Business Cooperation:@weikecs
Quant Trading & MM:bd@weex.com
VIP Program:support@weex.com

