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#GT# #BTC# #XRP# #ETH# #DOGE# The Federal Reserve's balance sheet has decreased by 17 billion Dollar in 30 days, is this the catalyst for Bitcoin? The U.S. Federal Reserve has reduced its balance sheet, raising discussions about the implications for Bitcoin (BTC) and the broader financial market. Recent data shows a significant decline in the Federal Reserve's holdings, raising concerns about liquidity and investor confidence, and what to expect later with interest rates remaining stable.
Massive shift in the Federal Reserve's balance sheet
According to a recent post published by "The Kobisi Letter" on X, the Federal Reserve's balance sheet has decreased by 17 billion Dollar over the past thirty days, now amounting to 6.7 trillion Dollar, the lowest level since April 2020. This represents a total decline of 2.3 trillion Dollar since the Federal Reserve began tightening monetary policy in April 2022.
This decline represents approximately 48% of the total assets purchased by the Federal Reserve in response to the post-Covid pandemic, which amounts to $4.8 trillion. The Federal Reserve currently holds $4.2 trillion in U.S. Treasury securities and $2.2 trillion in mortgage-backed securities.
In March, the central bank announced a slowdown in the pace of monthly quantitative tightening. This situation may worsen as it seeks alternative ways to support the economy, having kept interest rates unchanged this week. Notably, the bank reduced them from 60 billion Dollar to 40 billion Dollar, indicating a more cautious approach in the future.
Although these numbers may seem technical, their most significant implication is a clear flow of liquidity into the main market. The Federal Reserve is adding money to the system, which could lead to inflation of the circulating dollar, and thus its value. This often drives investors to seek other sources of value, such as Bitcoin๐ฏ๐๐โค๏ธโค๏ธโค๏ธโค๏ธ.