In November, the cryptocurrency market cap fell 15.43%, continuing a downward trend. Uncertainty surrounds the Federal Reserve’s December meeting, while the Bank of Japan is expected to raise rates, sparking concerns over the yen carry trade. Treasury companies like Strategy and Bitmine saw sharp share price declines of 36% and 38%, raising fears of a further crash. Looking ahead, December may bring a short-lived rebound as profit-taking eases and dip buyers enter a thinly traded, festive-season market despite ongoing macroeconomic challenges.
The Fed’s quantitative tightening (QT) is set to end on December 1, marking the conclusion of the hawkish tightening cycle that began in 2022. Starting in January, it is highly likely the Fed will enter a "balance sheet growth phase" by purchasing $20-25 billion in T-bills monthly. This move will effectively inject liquidity in a manner similar to a "QE-Lite," signaling a stronger easing stance than rate cuts alone. This macro liquidity pivot provides a solid foundation for BTC, which is considered the ultimate beta play on global liquidity. Historical patterns show that rapid Fed balance sheet expansions following QT periods tend to drive strong asset rallies.
The stock market has shifted from the overheated NVIDIA-OpenAI GPU "Red Camp" to the more balanced Google TPU "Green Camp" ecosystem. This transition highlights persistent risk appetite in bull markets, with crypto markets also rebounding in tandem. The overhang from NVIDIA value chain concerns appears to have been lifted for now.
Spot BTC ETFs saw their largest monthly outflows since launch, exceeding US$3.5B in November. This included several weeks where net outflows were near or above US$1B, while trading volumes also reached record levels over the month. These outflows aligned with broad crypto market drawdowns and ongoing macro uncertainty, with ETF flows reacting directly to changing risk conditions. In contrast, newly launched altcoin ETFs (e.g., SOL, XRP, LTC) saw net positive inflows since listing even as BTC ETFs saw persistent outflows.
Digital Asset Treasuries (DATs) face declining valuations amid market volatility and regulatory pressure. The January 2026 MSCI decision and increased scrutiny from the Japan Exchange Group threaten firms heavily invested in digital assets. Pressure is mounting for DATs to evolve by generating yield and integrating digital assets into core operations or risk liquidation.
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