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.