The Federal Reserve has injected $280 billion into the economy in the past seven weeks, equivalent to 32.56 million Bitcoin (BTC) and $40 billion more than the market cap of the entire crypto space. This massive operation was required so that the Federal Reserve would not lose control of the fed funds rate, which is its primary tool and halted a recessionary chain reaction that started due to a lack of liquidity. Also, it seems some extra was thrown in and liquidity is now so high that the fed funds rate is drifting lower, which is not supposed to happen, and this has helped drive stocks up to all-time highs.
In short, the Federal Reserve has propped up the stock market with a buying operation that used far more money than exists in the entire crypto space. This will be explained in detail in the following article in addition to how this impacts the crypto space.
In the middle of September, a seismic wave went through the financial markets, in the form of overnight general collateral repo rates skyrocketing to 10% where before they were hovering near 2%.
The repo market is essentially a way for banks and investors to get short term loans where treasury bonds and securities are traded for cash, and then, at some date in the future, usually the next day, the borrowers buy back the bonds/securities and pay some interest. The general reason that repo rates skyrocketed in mid-September was due to a lack of liquidity, meaning that creditors had no cash available to participate in the repo market, resulting in a mad scramble for cash among the borrowers. The reason banks that usually fund the repo market suddenly had no cash is likely due to rapidly rising debt and risk burdens.
Simultaneous to the repo panic, the fed funds rate jumped five basis points above its upper bound. The fed funds rate is the primary tool of the Federal Reserve and essentially determines the cost of money, i.e. how much it costs for top banks and corporations to borrow funds.