Recently, the movements in the US financial markets have attracted significant attention in the crypto world. The US banking sector has issued warnings, indicating that there may be serious risks of tapering in October. This "tightening of liquidity" could have a major impact on the crypto assets market, which has just begun to show signs of recovery.

The essence of tapering is the Federal Reserve's withdrawal of the funds injected during the pandemic in 2020. At that time, the Federal Reserve increased market liquidity by purchasing bonds on a large scale, which indirectly fueled the prosperity of the crypto assets market. However, now the Federal Reserve is no longer rolling over maturing bonds, which effectively equates to withdrawing liquidity from the market, potentially leading to a shortage of funds in the market.

Why has October become a critical period? There are several important signals worth following: U.S. bank reserves have declined for eight consecutive weeks, falling below $3 trillion for the first time, setting a new low for the year; there is chaos in the short-term financing market, with repurchase rates and overnight financing rates generally rising, forcing multiple financial institutions to seek help from the Federal Reserve's "Standing Repo Facility". All of these indicate that market liquidity is tightening.

What is even more concerning is the division within the Federal Reserve. Although Chairman Powell previously indicated that they might stop the balance sheet reduction in a few months, Vice Chairman Bowman and Governor Waller hold differing opinions. Waller even explicitly stated that the minimum reserves should be maintained at $2.7 trillion, while the current level of $2.98 trillion is already close to this critical point. This internal division creates uncertainty about the policy direction in October, which is precisely the factor that the crypto assets market fears the most.

For crypto assets investors, this uncertainty may be more challenging than market crashes. In the face of potential changes in Federal Reserve policies, investors need to remain vigilant, closely follow market trends, and adjust their investment strategies accordingly. At the same time, this also highlights the close relationship between the crypto assets market and traditional financial policies, reminding us to understand and predict the trends of crypto assets from a more macro perspective.