Federal Reserve Mulls Reserve Reduction to $2.6 Trillion Level

2 mins mins

Key Points:

Federal Reserve considers reducing reserves to $2.6 trillion, affecting liquidity.
Bank liquidity and short-term rates may experience volatility.
Historical QT cycles impacted Bitcoin and Ethereum price movements.

Federal Reserve Board member Christopher J. Waller stated that the Fed’s reserve levels could shrink to $2.6 trillion, emphasizing its importance for monetary policy on September 25, 2025.

Liquidity conditions and interest rates are likely affected, influencing banks and financial markets including cryptocurrencies like Bitcoin and Ethereum, with potential for increased market volatility.

Fed Announces Reserve Target in Quantitative Tightening Strategy

Federal Reserve Board member Christopher J. Waller outlined possible plans for reducing the Fed’s reserves to around $2.6 trillion on September 25, 2025. This development aligns with ongoing quantitative tightening efforts, aimed at adjusting the balance sheet and managing liquidity levels within the market. Waller’s comments resonate with the Fed’s broader strategy on asset management.

Crypto markets may experience volatility, especially as risk assets react to decreased liquidity. Crypto assets like Bitcoin and Ethereum have shown increased fluctuations during past quantitative tightening cycles. Fed’s communication is a key driver of sentiment, influencing both traditional and digital assets.

Crypto Volatility Anticipated as Liquid Pools Dry Up

Did you know? During previous Fed reserve reductions, markets experienced sharp reactions, particularly in the digital asset space. This highlights the broader implications the Federal Reserve’s policies can have beyond traditional markets.

Bitcoin (BTC) currently trades at $109,551.16 with a market cap of $2.18 trillion and dominates 58.25% of the market. Over the last 24 hours, its trading volume saw a 41.87% change, reflecting increased volatility due to market conditions. CoinMarketCap data indicates that Bitcoin’s price dropped 3.58% in the past 24 hours and 7.07% over the past week.

bitcoin-daily-chart-3457 — Bitcoin(BTC), daily chart, screenshot on CoinMarketCap at 18:50 UTC on September 25, 2025. *Source: CoinMarketCap*

The Coincu research team indicates that liquidity reductions may impact asset volatility further. Historical trends from prior Fed actions show that Bitcoin and other cryptocurrencies tend to react to liquidity shifts, suggesting potential price volatility ahead. Regulatory contexts and technological responses could see adjustments aligned with monetary developments.

DISCLAIMER: The information on this website is provided as general market commentary and does not constitute investment advice. We encourage you to do your own research before investing.