The cryptocurrency market enters December with noticeable turbulence and a growing number of fundamental factors. Bitcoin is fluctuating around key levels, and investors are paying closer attention to the decisions of the Fed and major financial players. Liquidity is gradually shifting, and the industry is receiving new points of capital inflow. Signals from regulators and banks are already changing participants' expectations.
This observation was shared by crypto blogger Coin22, analyzing the events of the beginning of the month. We talk about the main conclusions.
Hassett's appointment and the Fed's change in direction
In early December, an unexpectedly strong political statement emerged. Donald Trump indicated that his longtime economic advisor Kevin Hassett is being considered as the future head of the Fed in May 2026. Hassett's name is of interest not formally, but because of his approach to the economy.
Hassett believes that the rate in the U.S. is too high and is hindering business activity. He advocates for cheaper money and does not rule out a sharp rate cut if circumstances require it. This perspective changes market participants' expectations, as under soft policy, money begins to move faster, and access to financing becomes easier. Such a shift in direction can restructure the entire system from the bond market to demand for risk assets.
Current Fed Chair Jerome Powell is increasingly perceived as someone who does not determine the long-term direction of policy. Investors are already looking ahead and assessing what model the new leader will bring.
Liquidity reversal after the completion of QT
The Fed has completed a three-year period of quantitative tightening, reducing the balance sheet by $1.5 trillion. After a time, the regulator moved to injecting funds through overnight reverse repo operations — essentially, these are short-term loans to banks secured by collateral. In one day, $13.5 billion entered the system, which looks like a shift towards easing.
The reasons are apparent: banks are feeling a shortage of short-term money, reserve requirements are rising, and the government debt market is overloaded with supply. In such a situation, the Fed chose a path of support rather than continuing a tight course.
The historical memory of the market is good. After the completion of QT in 2019, Bitcoin rose from $3,000 to $14,000. Against the backdrop of the 2020 easing, the growth was much stronger — from $6,000 to $69,000. The periods are not completely similar, but the nature of liquidity movement now resembles those years.
Weakness in the labor market and expectations of a rate cut
The November labor market report in the U.S. surprised with a sharp turnaround. The economy lost 32,000 jobs, although a slight increase was forecasted. The revision of October's data added another note: the slowdown is already happening, without a gradual transition.
Against such figures, market expectations have shifted rapidly. The probability of a rate cut in December has risen to 90%. Bitcoin gained about $10,000 within two days, reacting to expectations of a softer policy.
New SEC rules and the relaunch of American Web3
Alongside events surrounding the Fed, the industry is discussing the SEC's decision. Paul Atkins confirmed that the exception for innovations will come into effect in January 2026. Companies will have the opportunity to test on-chain services, asset tokenization, payment protocols, DeFi, and smart contracts in a regulated but more flexible environment.
The American share in global blockchain investments fell from 40% to 18% in recent years. The new regime has the potential to reverse the trend and raise the figure to 25-30%. The SEC's approach is changing the government's attitude towards Web3: instead of pressure, an environment is emerging where products can be built without fear of immediate lawsuits.
Institutionals are increasing interest in Bitcoin
A major decision came from Vanguard. The company manages assets of approximately $11 trillion and serves over 50 million clients. Now investors have the opportunity to buy Bitcoin ETFs through Vanguard's brokerage platform. Even a minimal allocation carries a noticeable effect: 0.1% is equivalent to an inflow of about $11 billion. At the level of 1%, the figure reaches $110 billion, which is comparable to the largest flows in the history of the crypto market.
Bank of America has added confidence to the market. Clients are recommended to allocate up to 4% of their portfolio to Bitcoin and other digital assets. With an average portfolio size, this recommendation translates into a significant potential inflow — from tens to hundreds of billions of dollars. The banking sector thus effectively cements Bitcoin as a standard asset for diversification.
Why the market is moving cautiously
Despite a strong foundation, Bitcoin is not growing as fast as some players would like. Liquidity is just beginning to return, and large funds typically enter smoothly. The market is consolidating at important levels and building a structure before a possible movement further.
Easing of Fed policy, new SEC regulatory model, expanded access to Bitcoin ETFs, and support from banks are forming a stable foundation for future trends.
Risks that could slow down the dynamics
Several factors remain significant. U.S. inflation statistics can change rate expectations. Another element is the policy of the Bank of Japan. Rate hikes in the past have led to declines in the crypto market, although the new stimulus program of $185 billion partially offsets potential consequences.
Bitcoin levels in December
Bitcoin is holding above $90,000. A confident close of the week above this level will become an important technical signal. Some market participants view the current zone as a launchpad for movement towards $100,000. The further scenario will depend on a combination of macroeconomic conditions and the behavior of institutional players.
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