Netizen Premium | Bitcoin Deep Dive #37

What The Fed's Repo Facilities Means for Bitcoin

The Fed Quietly Rewired Liquidity

The Federal Reserve cut interest rates by 25 basis points last week and officially ended quantitative tightening, but the real story lies in the operational shift behind the scenes. Beginning December 1, the Fed will reinvest maturing mortgage bonds into short-term Treasury bills, a move that stabilizes funding markets and quietly adds reserves without calling it QE. Powell acknowledged recent pressure in repo markets and noted that the Fed continues to monitor “our repo facility,” referring to the Standing Repo Facility that provides overnight cash to banks and dealers against Treasuries. Alongside the Securities Lending Facility, which helps relieve collateral stress and smooth Treasury settlement, these mechanisms now function as permanent liquidity backstops for the bond market. These facilities are stepping stones to full yield curve control, a future where the Treasury market survives solely on printed money to prevent collapse. This is catastrophic for bonds and fiat money, but bullish for everything else: stocks, real estate, commodities, and Bitcoin.

TLDR: The Fed quietly reintroduced structural liquidity support through its balance sheet and funding operations, reinforcing the Everything Rally regime.

Asset Owners Win, Workers Lose

Our K-shaped economy is accelerating toward technocratic capitalism, where those who control AI infrastructure, data centers, and energy assets will dominate the competitive landscape. Last week, Amazon announced 14,000 corporate job cuts as AI replaces white-collar labor, while NVIDIA closed in on a $5 trillion valuation, proving that equity owners capturing productivity gains while hollowing out the labor market is the design, not a bug. This is the direct descendant of wealth inequality that began when Nixon severed the dollar from gold in 1971, now turbo-charged by artificial intelligence threatening anyone in knowledge work. The S&P 500 and NASDAQ rally because central bank liquidity props up asset prices, but real purchasing power for wage earners continues its five-decade erosion. The only winning move is owning businesses, property, or provably scarce assets, because holding fiat cash or working for a salary means getting bled by a system designed to transfer wealth upward.

TLDR: Technocratic capitalism rewards those who own AI infrastructure and scarce assets while hollowing out labor, making Bitcoin essential protection against systematic wealth transfer.

AI Investment Fuels Risk-On Reflation

Markets remain in a GOLDILOCKS regime: strong enough growth to justify equity valuations, but not hot enough to force Fed tightening, with artificial intelligence investment serving as a national security priority that keeps capital flowing. Gold maintains BULLISH momentum while stocks rally on AI infrastructure spending, confirming that REFLATION is the dominant upcoming macro regime. The US dollar sits NEUTRAL, neither tightening global liquidity nor signaling panic, while Bitcoin remains NEUTRAL. This environment validates the Everything Rally thesis: when policymakers backstop markets, money loses its value and liquidity chases real assets.

TLDR: Goldilocks conditions and AI-driven reflation will keep asset prices higher during the Everything Rally.

Below we’ll dive into the on-chain data supporting our Bitcoin DCA model.