Coinbase: The Fed's "hidden QE" will support the crypto market; the policy environment may be more dovish than expected.
TL;DR
Coinbase notes the Fed's earlier-than-expected liquidity injection and shift to net balance sheet growth, which could act as 'hidden QE' to support crypto markets. The policy outlook may be more dovish than expected, with potential rate cuts in 2026.
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Odaily Odaily reports that Coinbase Institutional posted on social media that while the Federal Reserve's 25-basis-point rate cut this week was in line with market expectations, its plan to purchase Treasury bonds over the next 30 days can at least be seen as a positive sign. The details of this plan are as follows:
• Initial operation size: $40 billion
• Launch date is December 12th.
This liquidity injection came earlier than expected, and reserve growth may continue until April 2026. We believe that the Fed's shift from balance sheet reduction to net injection can be seen as "light quantitative easing" or "hidden QE," which may support the cryptocurrency market. Considering the reserve management purchase program and the federal funds futures market's expectation of two more rate cuts (totaling 50 basis points) in the first nine months of 2026, the policy environment may be more dovish than anticipated.