According to forecasters on the cryptocurrency-based prediction site Polymarket, the US Federal Reserve (Fed) will undoubtedly end its quantitative tightening (QT) program by May 2025. The bull market’s ecstatic run may be triggered by this, according to many analysts.
“Will Fed end QT before May?” is the wager. has already finished with more than $6.25 million in trading volume and a 100% yes vote.
Betters can place bets on actual events using Polymarket, a cryptocurrency-based prediction market. During the US presidential election campaign of 2024, it gained enormous popularity. Users of Polymarket correctly forecasted Donald Trump’s rise at a time when the mainstream media was all projecting a victory for Democratic nominee Kamala Harris.
The “Yes” vote hovered between 40 and 60 percent during the first week of the “Will Fed end QT before May?” market opening. Things didn’t alter until March 13, when millions of dollars poured into the market, primarily for voting purposes.
The “Yes” vote reached a unanimous “100% chance” on March 14 and remained there until the market closed on Sunday, March 16. Following the conclusion of QT and the start of QE (quantitative easing), pundits and cryptocurrency aficionados are now predicting that the bull market will reach its peak.
Regarding the Fed’s March BPS (basis points) decision, Polymarkets has a 99 percent likelihood of staying at its current rate of 4.25–4.5%. Given this and Polymarket’s track record of accurately forecasting similar events, we might be in for a sluggish start to April for cryptocurrencies, followed by a surge at the end of the month as investors start preparing for the Fed’s May QT cut.
Since June 2022, the Fed has maintained its current QT regime. The Fed employs QT to eliminate excess liquidity from the market and boost long-term interest rates in addition to short-term rates.
But the commencement of QT in 2022 didn’t stop the price of equities and cryptocurrencies from rising; the S&P 500 kept rising, and Bitcoin started to rise after plunging below $20,000. Following consecutive years of remarkable expansion, both markets are currently finding it difficult to sustain their momentum as a result of recent macroeconomic developments brought on by the Trump administration.
Many now view the rising perception that the Fed is about to end QT as a bullish stimulus for the cryptocurrency market. In the past, this has meant that surplus liquidity will eventually find its way into riskier assets, with cryptocurrency leading the way.
In addition to rate reductions in Q3 and Q4 of this year, there might be sufficient stimuli to terminate the multi-month decline in the cryptocurrency markets.
