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- Liquidity conditions may improve soon as the Fed ends QT and banks increase lending, supporting a potential crypto market rebound

- Cathie Wood revises Bitcoin's 2030 outlook while Ark boosts crypto-related holdings amid rising stablecoin influence on market structure

A shift in U.S. liquidity conditions is emerging as a central theme in new market commentary, with Ark Invest CEO Cathie Wood signaling that the recent downturn across digital assets may be nearing its end. Speaking in the firm's November webinar, Wood said they expect the liquidity squeeze that has pressured crypto valuations to reverse in the coming weeks.

Her remarks arrive as several analysts point to similar trends, citing changes in Federal Reserve policy and improving bank-lending data.

Liquidity Indicators Show Early Signs of Relief

Wood stated that the crypto market has historically reacted ahead of broader financial systems when liquidity expands or contracts. She told listeners that a full recovery could take shape within a month if current conditions continue to ease.

Her assessment aligns with recent comments from BitMEX co-founder Arthur Hayes, who attributed the latest market decline to a drop in USD liquidity but has since noted that liquidity is now improving.

Hayes highlighted that U.S. banks increased lending activity this month and pointed to the Federal Reserve's upcoming policy shift. The Fed is expected to conclude quantitative tightening on December 1, a development that analysts say could directly influence the flow of capital across risk-asset markets, including crypto.

In addition, rate expectations have strengthened ahead of the December FOMC meeting. Current data suggests an 85% probability of a 25-basis-point cut, which has contributed to renewed interest in major digital assets. As previously reported, Bitcoin (CRYPTO: $BTC ) briefly reclaimed the $90,000 level amid growing confidence that policymakers may implement a third rate cut this year. JPMorgan (NYSE: $JPM ) also projected that a rate reduction is likely next month.

Analysts Track the Policy Shift's Impact on Crypto

Several commentators, including Raoul Pal, have pointed to the end of quantitative tightening as a potential catalyst for liquidity expansion. They argue that renewed government spending and rising money supply could influence capital allocation toward alternative assets. These expectations have formed a notable part of current market discussions.

Wood also addressed her updated long-range outlook for Bitcoin, lowering her 2030 target from $1.5 million to $1.2 million. She cited the rapid growth of stablecoins as a core factor, describing them as a major force in emerging markets. Wood noted that stablecoin issuers have become significant buyers of U.S. Treasuries, and she expects continued expansion of this segment.

Ark Invest has recently increased exposure to crypto-related equities, purchasing $7.6 million in Coinbase (NYSE: $COIN ) shares and adding positions in Block, Circle (NYSE: $CRCL ), Robinhood (NASDAQ: $HOOD ), and Bullish (NYSE: $BLSH ). The firm also acquired $2.8 million of its spot Bitcoin ETF.