Crypto research firm Delphi Digital argues that global dollar liquidity has quietly flipped from a structural headwind to a marginal tailwind for risk assets for the first time since early 2022 – with 2026 emerging as the key inflection point for digital assets.

In a macro thread on X, Delphi says “the Fed’s rate path heading into next year is the clearest it’s been in years.” Futures imply another 25-basis-point cut by December 2025, taking the federal funds rate to roughly 3.5–3.75%. “The forward curve prices at least 3 more cuts through 2026, putting us in the low 3s by year-end if the path holds,” the firm notes.

Short-term benchmarks have already adjusted. According to Delphi, “SOFR and fed funds have drifted toward the high 3% range. Real rates have rolled over from their 2023–2024 peaks. But nothing has collapsed. This is a controlled descent rather than a pivot.” The characterization is important: this is not a return to zero rates, but a gradual easing that removes pressure on duration and high-beta assets.

The more consequential shift is in the liquidity plumbing. “QT ends on December 1. The TGA is set to draw down rather than refill. The RRP has been fully depleted,” Delphi writes. “Together, these create the first net positive liquidity environment since early 2022.”

Crypto Bulls Can Rejoice As The Macro Regime Is Shifting

In a follow-up post, the firm is explicit: “The Fed’s liquidity buffer is gone. Reverse Repo Balances collapsed from over $2 trillion at the peak to practically zero.” In 2023, a swollen RRP allowed the Treasury to refill its General Account without directly draining bank reserves, because money-market funds could absorb issuance out of the RRP. “With the RRP now at the floor, that buffer no longer exists,” Delphi warns.

From here, “any future Treasury issuance or TGA rebuild has to come directly out of bank reserves.” That forces a policy choice. As Delphi puts it, “The Fed is left with two options: let reserves drift lower and risk another repo spike or expand the balance sheet to provide liquidity directly. Given how badly 2019 went, the second path is far more likely.”

In that scenario, the central bank would shift from shrinking its balance sheet to adding reserves, reversing a core dynamic of the past two years. “Combined with QT ending and the TGA set to draw down, marginal liquidity is turning net positive for the first time since early 2022,” Delphi concludes. “A key headwind for crypto could be fading.”

For the crypto market, the firm frames 2026 as the pivotal year: “2026 is the year policy stops being a headwind and becomes a mild tailwind. The kind that favors duration, large caps, gold, and digital assets with structural demand behind them.”

Rather than calling for an immediate price spike, Delphi’s thesis is that the macro regime is shifting toward a more supportive, liquidity-positive backdrop for Bitcoin and larger crypto assets as policy eases and the era of aggressive balance-sheet contraction comes to an end.

At press time, the total crypto market cap was at $3.1 trillion.

Arca CIO Jeff Dorman calls the current market slide “one of the strangest crypto sell-offs ever,” arguing that price action is increasingly disconnected from both macro conditions and sector fundamentals.

Why The Crypto Sell-Off Is “Strange”

In a post on X, Dorman notes that traditional risk assets are behaving exactly as textbooks would suggest: “equity, credit and gold/silver markets are launching to ATHs every month because the Fed is cutting rates, QT is ending, consumer spending is strong, record earnings, AI demand still incredibly strong.” Yet crypto continues to grind lower, even as most of the usual bearish narratives have been invalidated. “MSTR isn’t selling, Tether isn’t insolvent, DATs aren’t selling, NVDA isn’t blowing up, the Fed isn’t turning hawkish, the tariff wars aren’t restarting,” he writes, before admitting: “I still have no idea why crypto is down.”

In his accompanying essay “The Selling Nobody Can Explain” (Dec. 1, 2025), Dorman details a market that has fallen in seven of the past eight weeks, with only a brief Thanksgiving rally before renewed selling as Japanese markets reopened. The first leg lower followed the October 10 exchange outages at Binance and others, weeks ahead of the FOMC meeting. Much of November’s weakness was retrospectively ascribed to Fed Chair Jerome Powell’s hawkish tone, which drove December rate-cut odds from “almost a 100% chance” to “as low as 30%.”

What makes the late-November continuation unusual, he argues, is that the macro backdrop has since turned supportive again. Core PPI printed at 2.6% versus 2.7% expected, early post-shutdown labor data point to a cooling jobs market, and December cut odds have rebounded to around 90%. Equities “staged a fierce rally to close November in positive territory,” and betting markets are effectively pricing in Kevin Hassett, a known policy dove, as the next Fed chair. Against that backdrop, Dorman asks, “why are digital assets still selling off on every piece of bad news but failing to rally with good news?” His answer is stark: “I have no idea.”

One working explanation is that the marginal seller is no longer crypto-native. Dorman cites Bill Ackman’s remark that his Fannie Mae and Freddie Mac positions are trading in sympathy with crypto, despite orthogonal fundamentals. The comment, he argues, reflects the growing overlap between TradFi, retail and digital-asset investors. What was “a pretty isolated industry” is now deeply integrated into multi-asset portfolios, and in those structures “investments in crypto seem to be the first to go.” The crypto ecosystem itself is highly transparent; by contrast, “TradFi remains more of a black box. And that black box is dominating flows and activity right now.”

Wall Street Is Coming

Dorman revisits Arca’s framework that token value is a mix of financial, utility and social components. With sentiment at cycle lows, it is no surprise that assets whose value is mostly social – Bitcoin, L1s, NFTs, memecoins – are under pressure. The surprise is that tokens with stronger financial or utility anchors have not consistently outperformed. “While some do (BNB), most do not (DeFi tokens, PUMP). So that’s a bit odd.” Equally unusual, he says, is the absence of “cavalry” buyers; instead, more players are “piling into the weakness, expecting more weakness,” leaning on momentum rather than fundamentals.

On MicroStrategy, Dorman reiterates that the firm “will never be forced sellers,” despite recurring headlines. On Tether, he pushes back against a rapid narrative shift from mega-valuation to supposed insolvency. With USDT roughly 70% backed by cash and equivalents and 30% by gold, bitcoin and loans, he argues that “any questions about their liquidity are just silly,” given the implausibility of 70% same-day redemptions. Solvency risks would require large losses across that 30% sleeve, which he sees as manageable given the parent company’s profitability.

Ultimately, Dorman reduces the puzzle to flows and market structure. “There are no buyers within the crypto walls today,” he writes. Crypto-native investors are “exhausted,” and the Wall Street firms that are “coming” into the asset class “aren’t here today.” Until crypto assets can be purchased seamlessly within existing mandates and systems at institutions like Vanguard, State Street, BNY, JPMorgan, Morgan Stanley and Goldman Sachs, “they just won’t do it.” For now, he concludes, the persistent weakness “certainly has us scratching our heads.”

At press time, the total crypto market cap was at $2.9 trillion.