Fed Rate Cut Halts QT, Sparks $795M Crypto Liquidations
On October 29, the US Federal Reserve delivered its second Fed rate cut of 2025, lowering the benchmark rate by 25 basis points to a 3.75–4.00% target. Approved by a 10–2 vote with dissents from Governors Miran and Schmid, the move highlighted rising downside risks to employment amid a government shutdown and limited data. At the same time, the Fed announced it will halt quantitative tightening (QT) from December 1, pausing its balance-sheet runoff.
This Fed rate cut and QT pause sent shockwaves through the crypto market. Bitcoin (BTC) slid 2.55% to around $110,764, triggering $795.2 million in 24-hour liquidations, according to Coinglass. Analysts view the dovish pivot as a long-term bullish signal for digital assets, expecting improved liquidity and higher risk appetite. Exchange OKX noted that lower borrowing costs and paused QT should support cryptocurrencies. Traders should watch for renewed liquidity-driven rallies and manage volatility around this Fed policy shift.
Bullish
Although Bitcoin experienced a near-term drop and significant liquidations following the Fed rate cut and QT halt, the move injects fresh liquidity into markets and lowers borrowing costs. Historically, Fed rate cuts and paused quantitative tightening have spurred risk-on behavior, benefiting digital assets. Traders should expect volatility in the short term but anticipate that increased liquidity and improved risk appetite will drive longer-term price appreciation in the crypto market.