Double Bullish News Ignites the Market! Bitcoin Surges Past $90,000 as the Fed "Injects Liquidity" and Vanguard "Opens the Floodgates" in Resonance

Driven by powerful dual catalysts at both the macro and industry levels, Bitcoin’s price has surged past the $90,000 mark, sweeping away recent gloom. The most direct driving force comes from the Federal Reserve’s official announcement to end quantitative tightening (QT), sending a clear signal of easing to the market, along with an initial $13.5 billion liquidity injection that has boosted all risk assets.

Meanwhile, asset management giant Vanguard opened up trading of Bitcoin and other crypto ETFs to its clients, triggering a strong buying wave dubbed the “Vanguard Effect.” The market’s optimism, combined with short liquidations, has created a positive feedback loop. Just after the price broke $90,000, approximately $135 million worth of short positions were liquidated. However, well-known investor Michael Burry once again voiced his opinion, insisting that Bitcoin is “worthless,” providing a dose of sober reflection amidst the market frenzy.

Macro Tailwind: Fed Ends QT, Liquidity Expectations Reverse

The biggest bullish news for the crypto market this week didn’t come from within the industry, but from the heart of global central bank decision-making. The Federal Reserve officially announced the end of its years-long quantitative tightening policy, a move widely interpreted by the market as a key sign that the global liquidity tightening cycle has reached an inflection point. The end of QT means the Fed has stopped draining large amounts of liquidity from the financial system—the most stressful “liquidity drain” period is over. As a supplement, the Fed injected $13.5 billion in liquidity, further strengthening market expectations of a return to easing.

For assets like Bitcoin—viewed by many investors as a “macro hedge” and “non-sovereign store of value”—an improvement in global liquidity is fundamentally bullish. When the market expects more “liquidity” in the future, demand for scarce assets naturally rises. More importantly, expectations for multiple Fed rate cuts in December and even into 2025 have surged. According to prediction market data, traders currently expect three rate cuts in 2025, with a 90% probability for the third cut. This narrative shift from “tightening fear” to “easing anticipation” provides the strongest macro backdrop for price recovery and appreciation of long-term assets like Bitcoin.

Analysts such as Tom Lee of Fundstrat even believe that current upward momentum could push Bitcoin to new all-time highs as early as January next year. The foundation for this optimism is the clear shift in monetary policy, which changes institutional asset allocation logic and prompts capital to move from pure defense to seeking growth or alternative assets that may perform well during an easing cycle.

“Vanguard Effect” Emerges: Traditional Capital Gates Officially Open

If the Fed’s policy shift is the “sunshine” shining on all, then Vanguard’s decision is the “timely rain” directly nourishing Bitcoin. This asset management giant, with over $7 trillion in client assets, made a historic shift on December 2: allowing its brokerage clients to trade spot crypto ETFs, including Bitcoin, Ethereum, XRP, and SOL.

Bloomberg Intelligence analyst Eric Balchunas aptly described the impact of this event as the “Vanguard Effect.” He observed that at the moment the U.S. market opened and Vanguard clients could start trading crypto ETFs, Bitcoin’s price jumped by about 6%. This is no coincidence, but a direct reflection of a massive influx of fresh buying power. Vanguard’s client base is known for long-term investing, retirement savings, and relative conservatism—they were previously almost entirely shut out of the crypto market. The opening of this gate means millions of traditionally minded investors who previously only invested in index funds and bonds now have a convenient, compliant channel to allocate a small portion of their assets to cryptocurrency.

Core Drivers and Market Reactions of This Bitcoin Rally

Macro Driver: Fed ends Quantitative Tightening (QT), signals easing

Initial Liquidity Injection: $13.5 billion

Industry Driver: Vanguard opens up crypto ETF trading to clients (“Vanguard Effect”)

Key Price Breakthrough: Breaks above $90,000 psychological level

Short Liquidation Value (after $90,000 breakthrough): Approximately $135 million

Market Rate Cut Expectations: Three rate cuts in 2025, with a 90% probability for the third cut

This “mainstreaming” process led by traditional financial giants brings a scale of capital and confidence boost that no previous single bullish factor could match. It perfectly resonates with the Fed’s macro pivot: one side brings a friendlier monetary environment, while the other side opens the floodgates for capital inflow. Together, they have quickly reversed market sentiment, turning the previous downtrend caused by leverage liquidations and risk aversion into a powerful short squeeze rally.

Shorts Take a Hit, Market Sentiment Reverses in a “V-Shape”

With the dual boost from macro and industry catalysts, short traders betting on a further market downturn have taken heavy losses. According to Coinglass data, after Bitcoin broke through the $90,000 mark, about $135 million in short positions across the crypto market were forcibly liquidated. This short liquidation itself has become additional fuel for price increases, creating the classic “upward move—short squeeze—further upward move” positive feedback loop.

The market’s Fear & Greed Index is likely rebounding rapidly from the “extreme fear” zone. This sharp sentiment reversal once again demonstrates the crypto market’s extreme sensitivity to liquidity expectations. Investors’ focus has quickly shifted from concerns over short-term disturbances—like Bank of Japan policy or geopolitical risks—to anticipation of an improved global liquidity environment next year. Although Bitcoin prices are still down about 18% over the past three months, a single-day 6% gain and a key technical breakout are enough to change the short-term technical landscape and market psychology.

However, amid widespread optimism, caution is warranted regarding potential short-term overheating. After a sharp rise, prices may test previous resistance areas and undergo technical pullbacks. For trend traders, the key is to judge whether this breakout is the start of a new uptrend or just another strong rally in a bear market. This will require subsequent sessions to see if prices can hold above key moving averages and whether ETF inflows remain sustained.

Contrarian View: Michael Burry Throws Cold Water Again, Calls Bitcoin “Worthless”

While the market celebrates the breakthrough above $90,000, Michael Burry—famous for predicting the 2008 financial crisis and known from “The Big Short”—has once again issued sharp criticism. In a podcast interview with Michael Lewis, he reiterated that Bitcoin is “worthless” and believes its rise to six-figure prices is purely a speculative bubble, lacking quantifiable fundamental support.

Burry’s criticism is not new—he has long questioned Bitcoin’s valuation methods and likened its price movements to historical speculative manias. His view represents the core concerns of some traditional value investors: Bitcoin does not generate cash flow, and its value is entirely based on community consensus and market supply and demand—making classic valuation methods like “discounted cash flow” inapplicable within traditional financial frameworks. He believes the widespread acceptance of Bitcoin’s high valuation is a typical manifestation of speculative behavior.

It’s worth noting that Burry’s concerns extend beyond Bitcoin. In the same interview, he expressed a pessimistic view of the entire stock market, believing that concentrated capital and inflated valuations have undermined price discovery, potentially setting the stage for a broad market crash. His remarks remind investors not to overlook systemic risks in global asset markets while chasing the crypto market rebound. As a “voice of reason” in the market, Burry’s views provide necessary balance to the prevailing enthusiasm, prompting investors to consider: How much of the current price surge is based on long-term value, and how much is driven by short-term liquidity expectations?