Bitcoin News Today: Altcoins Underperform Amid Fed QT, Eye Rate Cut Relief

The recent continuation of the U.S. Federal Reserve’s quantitative tightening (QT) program has led to a significant pullback in alternative cryptocurrency assets, with many altcoins experiencing sharp price declines [1]. The Fed’s policy of letting securities mature without reinvestment has tightened liquidity, disproportionately affecting riskier assets like altcoins, which tend to be more sensitive to macroeconomic shifts [2]. While Bitcoin has shown relative resilience, the broader altcoin market has been hit harder, underscoring the sector’s dependence on liquidity conditions.

Market observers suggest that this downturn may not be long-lived. With inflation showing signs of moderation and economic growth softening, many analysts predict a Fed rate cut as early as September 2025, potentially alongside the winding down or pause of QT [1]. Such a policy shift would likely ease financial conditions and restore some level of liquidity, which could act as a catalyst for a turnaround in the altcoin market [3]. The historical pattern indicates that altcoins tend to outperform Bitcoin during periods of monetary easing, as investors seek higher returns in more speculative or innovative crypto projects.

The near-term volatility in the altcoin space reflects the broader uncertainty around the Fed’s policy path. While the central bank has shown no immediate inclination to reverse its QT strategy, the market is already pricing in the likelihood of a pivot toward a more accommodative stance. This expectation is evident in the way certain altcoins like Maker (MKR) and Litecoin (LTC) have outperformed Bitcoin in recent months, signaling divergent responses to liquidity conditions [3]. As the Fed moves closer to a policy shift, the current underperformance of altcoins may give way to a stronger relative rally, especially if liquidity conditions improve.

The interplay between QT and altcoin performance is a key factor shaping the crypto market’s near-term outlook. Investors are advised to remain cautious but attentive to potential turning points in the Fed’s policy trajectory. A shift away from QT could provide the necessary liquidity to reignite demand for higher-risk, higher-reward assets, with altcoins potentially leading the next phase of market recovery [1].

Source:

[1] https://www.tiktok.com/@cryptoscrushshow/video/7534072434228464902

[3] https://www.facebook.com/groups/793823444334728/posts/2525952747788447/