Federal Reserve’s $74 Billion Repo Spurs Crypto Rally

The New York Federal Reserve injected $74.6 billion into the economy on December 31, 2025, through overnight repo operations, impacting the crypto market significantly.

Bitcoin surged to $89,000 amid reduced selling pressure, hinting at a potential relief rally, while broader crypto market dynamics shifted slightly.

The New York Federal Reserve announced a $74.6 billion liquidity injection through overnight repo operations aimed at alleviating remaining year-end pressures. This is the largest single-day operation this year. The comprehensive operation targeted holiday liquidity demands and tax-loss harvesting.

In this third consecutive day of operations, the Fed purchased $31.50 billion in U.S. Treasury bills and $43.1 billion in mortgage-backed securities. Market Expert Ted Pillows noted:

“Crypto MCap has broken out of its downtrend. Things are looking good for a relief rally.” – source

Bitcoin experienced a noteworthy rally, surging to $89,000, while long-term holders paused sales, thereby easing selling pressure. This surge also lifted the broader crypto market, breaking several assets out of their recent downturn.

The operation reflects broader macroeconomic dynamics, intertwined with the Federal Reserve’s monetary policy. It follows a recent rate cut, and the introductions of new Treasury bill purchases, aimed at stabilizing market liquidity at the year’s close.

No specific industry leaders or prominent figures from crypto projects were connected to these actions. The focus remained on standard Federal Reserve operations, shedding light on the interplay between traditional finance and emerging digital assets.

Such financial activities by the Fed historically impact market dynamics. Observers are noting potential future implications for crypto adoption as liquidity infusions stimulate investor enthusiasm. While immediate reactions include Bitcoin’s rise, sustained effects will depend on economic and regulatory developments.