Quantitative Tightening (QT)
A monetary policy where central banks reduce asset holdings or drain reserves to tighten financial liquidity.
- Acronym
- QT
Quantitative tightening is the opposite of quantitative easing. A central bank lets assets mature without reinvesting, sells assets, or otherwise drains reserves from the financial system, reducing liquidity available to banks and markets.
QT can influence crypto indirectly through interest rates, leverage, risk appetite, and dollar liquidity. The effect is not mechanical: network fundamentals, regulation, exchange flows, and broader market conditions also matter.
Related terms
5 linkedExplore connected entries beyond the alphabetical index.
Inflation
→A sustained rise in the general price level, reducing a currency's purchasing power over time.
Emission Schedule
→An emission schedule defines when and how quickly new coins or tokens enter circulation.
Hard cap
→The maximum supply a cryptocurrency protocol permits, enforced by consensus rules or token contract logic.
Maximum Supply
→The predetermined total number of a cryptocurrency that will ever exist, enforced by the protocol's rules.
Market Cap
→Market cap estimates a cryptocurrency's total circulating value by multiplying price by circulating supply.
All terms and definitions may update as the Cryptionary improves.
