Fed to Inject $6.8 Billion Into Markets in First Repo Since 2020 — Why Crypto Is Paying Attention

The Federal Reserve (Fed) is set to inject about $6.8 billion into financial markets on December 22, 2025, via repurchase agreements. This marks its first liquidity operation of this kind since 2020, with around $38 billion deployed over the past 10 days as part of its year-end liquidity management.

This move comes in response to year-end liquidity strains and recent adjustments to the Fed’s standing repo facilities. While officials describe these steps as routine, crypto investors see them as bullish signals for risk assets.

Repurchase agreements, or repos, are a core tool for managing daily financial system liquidity. In a repo, the Fed lends cash to banks against high-quality collateral, usually Treasury securities. Banks quickly repay the cash to retrieve their assets, often within a single day.

These operations:

• Keep the system well-supplied with cash
• Prevent spikes in short-term interest rates, and
• Reduces stress in capital markets.

Activity often picks up in late December as liquidity tightens.

Federal Reserve data show that daily secured overnight financing rate (SOFR) market volumes averaged $2.7 trillion in 2025, with over $1 trillion conducted through repo operations. This reflects the vital role these tools play in market stability.

The December 22 operation appears on the Fed’s schedule with a $6.801 billion cap. Uniquely, it marks the Fed’s first liquidity-adding repo operation since 2020, setting it apart from the standing overnight repo facility established in 2021.

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