> the Fed's money needs to go somewhere

Having excess savings go into cryptocurrencies would be a stabilizing mechanism. It keeps it away from consumption, staving off inflation. And it keeps it away from financial assets, avoiding a generalized speculative boom. As long as cryptocurrencies remain decently segregated from the main financial system, the whole mechanism becomes a heat sink.

I'm not knowledgeable enough in monetary economics, but isn't this only half true? The money people are buying crypto with is going to whomever they purchased it from.

I really enjoyed what you've said here and I agree that the traditional finance and the wild west crypto finance world _can_ absolutely work in concert with each other.

Just liquidated BTC to cover a down payment at my local bank where I've paid off mortgages already. The VP of the loan department completely understood why I wouldn't keep my money in their bank anymore.

The FRED Blog, «What’s behind the recent surge in the M1 money supply?»

https://fredblog.stlouisfed.org/2021/01/whats-behind-the-rec...

Yes of course, the Fed created trillions of dollars and doesn't know what to do with it.