Axel Adler Jr, a well-known on-chain and macro research analyst, has recently tweeted that Polymarket traders unanimously expect the Federal Reserve to halt its Quantitative Tightening (QT) strategy before May 2025, assigning a 100% probability to this outcome. The steep shift in sentiment seen in mid-March highlights a growing belief that economic conditions and policy signals are pointing towards an imminent end to QT.
Market Confidence in QT Halt and Crypto Implications
With a trade volume surpassing $6.25 million, traders are backing their predictions with significant capital, suggesting strong confidence in an early end to QT. This shift in sentiment has been reinforced by recent economic indicators, strengthening expectations of a more accommodative monetary policy.
The potential end of QT by the Fed could mark a major shift toward looser financial policies, which would likely benefit Bitcoin ($BTC) and the broader cryptocurrency market. With increased liquidity and lower interest rates, investors might pivot towards Bitcoin and other digital assets as alternative stores of value. Historically, looser monetary policies have correlated with strong crypto market rallies.
Additionally, government bond yields may decline as investors anticipate greater demand for bonds, while a weakening US dollar could further drive institutional and retail interest in Bitcoin as a hedge against inflation and economic uncertainty.
Fed Pivot Could Reshape Crypto Markets
Axel Adler Jr’s insights highlight Polymarket traders’ expectations that the Fed will pivot before May 2025, ending QT. This anticipated policy shift could significantly impact Bitcoin and the cryptocurrency sector, fostering a bullish environment for digital assets as investors seek hedges against traditional market uncertainties.
