With the next Fed meeting looming, Benjamin Cowen breaks down why the bigger risk to crypto might not be rate cuts - but whether the Fed ends quantitative tightening (QT). He explains how this macro policy shift could affect Bitcoin dominance, altcoin performance, and the overall cycle outlook.
Cowen’s Outlook – Key Points
-
QT matters more than rate cuts – While another rate cut is expected, Cowen says the bigger focus should be on the Fed’s balance sheet and QT policy.
-
Ending QT could mark a cycle top – In past cycles, Bitcoin topped before QT ended. If QT ends soon, it may signal the bull market is nearly over.
-
Altcoins not ready to lead – Cowen warns that if QT ends and liquidity shifts away from Bitcoin, it may not create an “altseason” but signal a structural shift in the market.
-
Bitcoin dominance is key – As long as QT continues, Cowen believes liquidity will favor Bitcoin over alts. Ending QT could weaken this dynamic and introduce downside risk.
-
This cycle isn’t like 2021 – High interest rates and QT have made this a very different environment, where only top assets like BTC are gaining while most altcoins bleed.
-
The four-year cycle still fits – If QT ends in early 2026, it would align with Bitcoin topping in Q4 2025 - consistent with past cycle timing.
Final Takeaway
Cowen advises watching QT, not just interest rates. If the Fed ends QT early, it could mark the beginning of the end for this bull run. For now, sticking with Bitcoin remains the safer play until there’s clearer macro guidance.
