Coinbase: The Federal Reserve's shift from reducing its balance sheet to net injections may support the crypto market

Coinbase Institutional published an analysis on platform X stating that the Federal Reserve announced a 25 basis point rate cut this week, which was in line with expectations. However, its plan to conduct U.S. Treasury Reserve Management Purchases (RMP) within the next 30 days is at least a positive piece of news.

This liquidity injection came earlier than expected, and reserve growth may continue until April 2026. Coinbase Institutional believes that the Fed's shift from reducing its balance sheet to net injections is seen as "mild quantitative easing" or "implicit quantitative easing," which could provide support to the cryptocurrency market. Combined with the RMP and federal funds futures indicating two rate cuts (50 basis points) in the first nine months of 2026, it suggests that market hawkish sentiment may be lower than expected.