Federal Reserve's Support for US Stocks May Boost Liquidity in Crypto Market

The US stock market has grown by 68% over the past five years, adding approximately $6 trillion in market value this year, with 58% of Americans holding stocks. Analysts warn that if the stock market experiences a significant correction, the Federal Reserve may intervene by purchasing stock ETFs to support the market. Alvin Kan, Chief Operating Officer of Bitget Wallet, stated that once the Federal Reserve intervenes (through interest rate cuts, balance sheet expansion, or ETF purchases), the crypto market typically enters a medium to long-term upward trend due to a recovery in risk appetite and capital flowing back into high-beta assets. Tim Sun, a senior researcher at HashKey, pointed out that the macro pricing of crypto assets is linked to US dollar liquidity, real interest rates, and stock market risk sentiment. Once the market is convinced of a policy bottom, the risk premium for high-volatility assets will compress, benefiting Bitcoin and mainstream crypto assets.

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