Do you remember the global turmoil at the beginning of 2020? When the COVID-19 pandemic struck, the G20 urgently launched a $5 trillion economic rescue package. The Federal Reserve didn't hesitate and jumped right in—initiating an epic liquidity flood.

In just one week (March 2020), the Fed's balance sheet expanded by $586 billion, breaking the $5 trillion mark for the first time. The New York Fed was even more aggressive, directly committing to inject $5.4 trillion into the financial markets through repurchase agreements. This operation has a nickname in the market: "Invisible Gift Pack"—invisible but powerful.

Here comes the key point. The Fed's approach is quantitative easing (QE)—massively buying government bonds and mortgage-backed securities. Looking at the week of March 19-25, 2020, they purchased $375 billion in Treasuries and $212 billion in MBS. This isn't just simple buying and selling; fundamentally, it injects base currency into the entire financial system.

The effects were immediate. Bank reserve balances soared from $1.7 trillion in March 2020 to $4.3 trillion by the end of 2021. The problem followed—banking systems simply couldn't absorb that much money. What to do with the excess liquidity? It flowed back through overnight reverse repurchase agreements. As a result, this number also exploded: from less than $5 billion in March 2020 to $20 trillion in May 2022.

Where did this excess liquidity trapped in the financial system finally flow? Stocks, bonds, commodities... and the cryptocurrencies we care about. It was this wave of operations that quietly rewrote the underlying logic of the entire cryptocurrency market.