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coinpedia 2025-04-09 10:05:21

Is the Fed’s Secret Liquidity Boost Causing Bitcoin’s Price Crash

The post Is the Fed’s Secret Liquidity Boost Causing Bitcoin’s Price Crash appeared first on Coinpedia Fintech News Global markets are on edge as the Federal Reserve is secretly pumping money into the market, despite no official policy change. Treasury yields are rising, Bitcoin has crashed by $500 billion, and the U.S.-China trade war is heating up. With $6.5 trillion in debt coming due, experts warn that this secret money injection may not be enough to prevent a financial crisis. US-China Trade War Sparks Uncertainty One of the biggest concerns right now is the growing tension between the U.S. and China. Last week, Chinese Foreign Ministry spokesperson Lin Jian firmly opposed President Donald Trump’s proposed tariffs , stating that China would fight back. The increasing tariffs, which now reach up to 104% on certain Chinese goods, have led to economic strain between the two nations. Meanwhile, China’s slowing exports and capital outflow concerns are creating economic pressure. At the same time, the U.S. faces a $6.5 trillion debt crisis. Veteran analyst Peter Duan believes Trump’s tariffs aim to lower 10-year Treasury yields, but China’s move to sell U.S. Treasuries is pushing yields higher, worsening market instability. Trump forces tariff wars to lower the 10Y Treasury rate. Why? Because he needs to refinance the $6.5T of Treasuries coming due in a couple of months. China dumps US Treasuries to push yield up. Welcome to the world's biggest game of chicken. pic.twitter.com/YR5ttwvzk4 — Peter Duan (@BTCBullRider) April 8, 2025 Fed’s Silent Liquidity Boost While the Federal Reserve has not officially announced a policy change, but its actions tell a different story. The biggest sign is the sharp drop in the Fed’s Reverse Repo Facility (RRP), which fell from over $2.5 trillion in 2022 to just $148 billion, a staggering 94% decline. Experts say this quiet money injection acts like hidden quantitative easing (QE), adding cash to the system without announcing it. This has helped markets for now, but with RRP funds running low, worries are rising about what happens when this secret support runs out. Bitcoin Under Immense Pressure Bitcoin has been one of the biggest victims of this recent financial instability, losing over $500 billion since April 2. It briefly fell below $75,000 before a slight recovery, while altcoins such as ETH, XRP, Sol, ADA, and DOGE have struggled even more due to low liquidity. Historically, Bitcoin has thrived when money flowed into the market. Experts believe that if the Fed reintroduces QE in 2025, Bitcoin could surge again. In 2020, Fed liquidity pushed Bitcoin to record highs. Meanwhile, former Bitmex founder Arthur Hayes said that if history repeats, BTC might reach $250,000.

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