According to The Kobeissi Letter, the Federal Reserve's balance sheet declined by $17 billion over the last month, reaching $6.7 trillion, the lowest since April 2020 (source: @KobeissiLetter, May 9, 2025). Since April 2022, the balance sheet has been reduced by $2.3 trillion or 25%, representing nearly half of the $4.8 trillion the Fed purchased during pandemic-era quantitative easing. For crypto traders, this sustained quantitative tightening signals reduced liquidity and could increase volatility across Bitcoin, Ethereum, and altcoins as dollar liquidity tightens. Monitoring the Fed's balance sheet reductions is essential for anticipating crypto price swings and risk management.