The End of Quantitative Tightening (QT)? Today's (October 29) Federal Open Market Committee (FOMC) meeting may have quietly marked the end of the most dramatic balance sheet reduction in modern history. Since 2022, the Fed's total assets (weighted average assets) have shrunk by $2.4 trillion, a 26.6% decline in 1288 days; this drop far exceeds the 2015-2019 quantitative tightening cycle, which saw a 16.8% decline over nearly five years. The Fed's balance sheet itself is systemic liquidity, the foundation of Treasury financing, the repurchase market, and risk appetite in the stock and cryptocurrency markets. When the balance sheet contracts, liquidity flows out; when it expands, liquidity flows in. The Fed's buffer is running out. The reverse repurchase agreement (RRP) once held over $2.5 trillion in excess cash in money market funds. Now, this liquidity buffer is almost exhausted. Every dollar that was once held at the Fed has flowed back into Treasury bills or the banking system. Coupled with the record decline in WALCL (Net Balance Sheet Size), this suggests that the market has effectively exhausted its excess liquidity. Liquidity and Cryptocurrencies Bitcoin's market share (BTC.D) tends to move inversely to the Federal Reserve's balance sheet. > When WALCL expands, liquidity flows to other cryptocurrencies, and BTC.D declines. > When WALCL contracts, liquidity tightens, and BTC.D rises. The quantitative tightening policies of the past three years have coincided with the rise in Bitcoin's market share and the weakness of other cryptocurrencies. Importance of This FOMC Meeting If the Federal Reserve signals that quantitative tightening is about to end or that balance sheet normalization is "substantially complete," this will effectively stop the outflow of reserves and mark a turning point in global liquidity. The US dollar net liquidity chart clearly shows this: liquidity has stagnated for over 1200 days. A breakout from the current range would mark the first real expansion since 2021. However, ending quantitative tightening is not the same as quantitative easing. Real liquidity growth still requires balance sheet expansion, not just a halt to tightening. However, market movements depend on expectations. If quantitative tightening pauses here, liquidity expectations alone could trigger a shift in risk appetite, and cryptocurrencies, as the leading sector on the liquidity curve, would lead this shift. Conclusion The Fed's liquidity reduction may have been completed. WALCL is down 26%. RRP funding is exhausted, and net liquidity has nowhere to go. Even a pause signals the arrival of a new phase; but it is far from reaching the level of full-scale easing.