The U.S. Federal Reserve has reaffirmed its commitment to the Quantitative Tightening (QT) program, causing significant drops in altcoin prices. While Bitcoin has remained relatively stable, many altcoins have seen sharp declines.
Continuation of QT and Its Effects on Crypto Market
The Federal Reserve continues its QT program aimed at reducing its balance sheet by not reinvesting in maturing securities. This pulls liquidity from the market and tends to hurt riskier assets like altcoins more than larger, more stable cryptocurrencies like Bitcoin.
What to Expect in September: Possible Policy Easing
Market analysts believe that this QT phase may not last much longer. With inflation largely under control and economic growth slowing, many experts foresee a rate cut as early as September, possibly coupled with an end to QT.
Outlook for Altcoins Post-QT
If the Fed does cut rates and halt QT, it could trigger a rally in the altcoin market. Historically, altcoins have outperformed Bitcoin during periods of monetary easing, as investors seek higher returns in emerging crypto projects.
The Federal Reserve's continued QT is negatively affecting altcoin prices. However, in light of potential policy changes in September, there is optimism about the future dynamics of altcoins, which may lead the market once again.
