Mechanically, if the Fed starts adding reserves in size: Bank reserves rise Funding stress in money markets falls Real yields tend to drift lower Valuation multiples on long-duration assets (tech, AI, growth, Bitcoin) usually expand That is not opinion. We have already seen that pattern in prior QE phases.

On top of that, you have the asset choice logic: A 10y Treasury gives you a fixed yield (say ~4%). Gold gives 0%. Bitcoin gives 0%. But if the expected inflation rate and money creation go up, the real return on bonds falls, while the relative appeal of scarce assets rises. This is why gold and BTC often rally when people believe money printing is coming back.

In simple words: If investors expect more money and credit to be created, they look for assets that: cannot be printed can absorb big flows and have strong narratives That is why gold, and Bitcoin usually lead in a late cycle easing phase.

There is also a timing lag. When liquidity increases: financial assets react quickly consumer-price inflation reacts with a delay So there is often a 6–12 month window where: stocks, crypto, and commodities perform well central banks still argue that inflation is manageable This window is what traders often ride as the melt up, even though fundamentally it’s a fragile phase.

The risk comes later: If balance sheet expansion becomes large and fiscal deficits stay high, inflation can re-accelerate. At that point, the central bank is forced to: slow purchases raise rates again or at least stop cutting That’s when the bubble usually ends. But that is not the starting point. The starting point is usually very bullish.

So the thesis here is simple and conditional: The Fed has not announced QE. It has signalled that reserve growth is possible and likely at some point. If that signal turns into actual balance sheet expansion in this macro backdrop, history says: → risk assets can experience a very strong final upside phase → especially AI, growth, commodities, gold, and Bitcoin.