In this episode, Nik explains how the Federal Reserve’s slowdown in quantitative tightening (QT) is impacting Bitcoin and risk markets. He breaks down the balance sheet mechanics behind QT, showing how fewer Treasury runoffs reduce the burden on private investors, leaving more liquidity in the system. With fewer deposits redirected to government debt, more capital remains available for assets like Bitcoin and equities. Citing insights from former Fed trader Joseph Wang, Nik illustrates how even a modest shift in QT can influence market sentiment and asset prices—without any new money printing.
Link to article: https://fedguy.com/quantitative-tightening-step-by-step/
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Nik Bhatia's Twitter: https://twitter.com/timevalueofbtc
Creative Director Matthew Ball's Twitter: https://twitter.com/matthewrball
Chapters:
00:00:00 Why Bitcoin is Pumping After Fed's QT Slowdown
00:01:46 Integrating Self-Custody in Retirement Planning
00:03:26 Understanding Quantitative Easing vs. Quantitative Tightening
00:05:26 Understanding the US Government Deficit and Debt Dynamics
00:07:21 Understanding the Treasury Debt Rollovers and Their Impact on the Fed
00:09:06 Understanding the Role of Investors in Treasury Securities
00:10:50 Understanding Corporate Bonds and Deposits in the Economy
00:12:47 Understanding Treasury and Fed Balance Sheets
00:14:41 Impact of QT Announcement on Bitcoin and Markets
The Bitcoin Layer and its guests do not provide investment advice.