Last week, a major move by the Federal Reserve dominated the financial news cycle. On December 12th, the Fed announced a $40 billion treasury bond purchase plan, phased to inject liquidity into the market. This announcement immediately triggered a chain reaction across global capital markets.

Powell candidly stated at the press conference: "More liquidity is flowing into the market." This is not just a policy declaration but also a clear signal—the Federal Reserve is actively adjusting its monetary policy pace. According to the detailed schedule released at the event, this $40 billion bond purchase operation will begin in December and extend through 2026, involving multiple rounds of transactions with single-transaction sizes ranging from hundreds of millions to billions of dollars. The entire plan appears well-structured and meticulously designed.

What does this mean for the crypto market? First, increased liquidity will directly impact short-term interest rates. Assets like BTC and ETH, which are highly sensitive to macro liquidity, may see a rebound opportunity. When the Fed injects such a large amount of capital into the system, capital seeking returns often flows into high-risk, high-reward sectors, including cryptocurrencies. Recently, narratives around privacy coins have also been heating up, with privacy assets like ZEC potentially gaining attention.

However, it is important to be cautious. Large-scale liquidity injections, while pushing asset prices higher, can also raise inflation expectations and pose risks of asset bubbles. In the short term, markets may rise driven by liquidity, but medium-term sustainability depends on the continuation of this policy effect and changes in the global economic fundamentals. Crypto markets are inherently volatile, and how long the liquidity dividend can be sustained depends on subsequent policy directions and macroeconomic developments.

In summary: This move by the Federal Reserve sends a clear liquidity expectation to the market, which is a short-term positive for mainstream assets like ETH and BTC; but at the same time, potential risks should not be overlooked—don’t let the liquidity dividend cloud your judgment.