Welcome to the US Crypto News morning update – your essential overview of the key developments in crypto for the coming day.
Grab a cup of coffee as global markets enter a period of unprecedented friction as the era of synchronized economic cycles comes to an end. While the US quietly restores liquidity, China is caught in a state of deflation, and rising bond yields in Japan threaten to destabilize global capital flows. This has created a fractured, multilateral adjustment that will test both investors and policymakers.
Crypto news of the day: how the US, China, and Japan are now moving against each other
Global financial markets are entering a period of profound structural tension as old assumptions about synchronized economic cycles collapse.
Against this backdrop, investors are now faced with a fragmented global system, where competing forces shape market behavior. The forces are:
US liquidity injections,
Chinese political constraints, and
Japanese fiscal stress.
China's $18.9 trillion debt trap: why Beijing cannot print
In China, structural constraints limit the government’s ability to undertake large-scale monetary interventions.
The scale of the problem extends from local government debt reaching ¥134 trillion ($18.9 trillion). This is spread across 4,000 financing vehicles and has been exposed by a real estate crisis that has destroyed primary sources of income.
Unlike Japan, which used QE to stabilize its economy, China cannot create money. Article 29 of the Chinese law prohibits primary market bond purchases and capital flight is heavily penalized. Debt functions as a political instrument rather than an economic burden.
“Money creation would break the control mechanism that holds the Party together,” he explains to Shanaka Anslem.
The result: persistent deflation, a growth slowdown to about 4%, and a tightly managed renminbi (RMB, China's official currency).
Analysts warn that this extends years beyond consensus the global disinflationary forces, a phenomenon that Anslem calls the “long drag.”
Lagging balance sheet of the Fed: the hidden risks of post-QE tightening
Meanwhile, the US faces its own structural challenges. The Federal Reserve officially ended its three-year and five-month program of quantitative tightening (QT) on December 1, reducing its balance sheet from $2.43 trillion to $6.53 trillion.
Treasury debt fell to $4.19 trillion and mortgage-backed securities dropped to $2.05 trillion, undoing more than half of the pandemic QE expansion.
Analyst Endgame Macro notes that the real danger does not lie in the Fed's balance sheet itself, but in the delay of its effects.
The tightening over the past two years has pressured households, corporate bankruptcies have risen to 15-year highs, and small businesses remain without a safety net.
Even with interest rate cuts and any QE, policy cannot immediately reverse the stress already imposed on the economy.
The Fed is now switching to Reserve Management Purchases (RMP), with officials expected to buy $20-$40 billion in Treasury securities monthly starting in January 2026.
Shanaka Anslem explains that this quietly injects $480 billion per year in liquidity, while the mechanisms of QE are kept off the books.
Bank reserves, which are already at $3 trillion, will increase, shifting from abundant to sufficient, signaling changing conditions for risky assets, inflation hawks, and credit markets.
Japan's debt crisis: The 30-year ultra-low interest rate era is coming to an end
Across the Pacific, Japan faces a fiscal reckoning that could affect global markets, as revealed in a recent US Crypto News publication.
Japanese bond yields have risen, with the 20-year yield at 2.947%, the highest level since 1998.
Meanwhile, the 10-year yields are at 1.95% and levels marked as critical by institutional stress models. The Bank of Japan now has ¥28.6 trillion in unrealized losses, equal to 225% of its capital base, technically making it insolvent.
Rising yields threaten the $1.13 trillion in US Treasury securities held by Japanese investors, as well as the $1.2 trillion yen carry trade, which could unwind and cause $500 billion in global capital outflows over 18 months.
“For 30 years, Japanese yields artificially anchored global rates low. Today it broke. The world is shifting to a completely different rate regime,” said an analyst in a report.
No soft landing: The world enters a three-speed financial reset
The convergence of these forces—namely, US liquidity expansion, Chinese fiscal restraint, and Japanese debt stress—marks the end of synchronized cycles and the beginning of a multifaceted, volatile environment.
Analysts warn of structural consequences in credit markets, currencies, and even crypto. X, a market observer, notes that a Japanese bond sell-off could cause a Tether depeg, Bitcoin could weaken, and corporate crypto holders, such as MicroStrategy, could be forced to liquidate, leading to cascading effects in digital assets.
Meanwhile, corporate bankruptcies in the US are rising, with 655 applications by October 2025, the highest in 15 years. Shanaka Anslem warns that the reckoning has just begun as shadow banks and private credit absorb risks that traditional banks reject, masking underlying vulnerabilities.
With rates, interest rates, and fiscal tightening escalating tensions, analysts see 2026 as a year of structural adjustment.
Liquidity injections, market sentiment, and geopolitical factors will converge to determine winners and losers across various asset classes.
The long period of volatility is driven by structural, multi-year changes in monetary policy, fiscal discipline, and global capital flows.
Forces reshaping global finance
Investors should watch for:
US RMPs,
Fed rate cuts,
Shadow credit defaulters, and
Japanese capital repatriation,
These forces collectively pose risks, returns, and liquidity in ways not seen since the end of the post-global financial crisis (GFC) low-interest-rate era.
Crypto overview
Here is an overview of more US crypto news to follow today:
Crypto fund inflows reach $716 million as Bitcoin, XRP, and Chainlink lead the institutional shift.
Coinbase plans a full recovery in India, fiat support expected in 2026.
Bitcoin to $170,000: Reaganomics 2.0 will propel BTC in 2026.
Peter Brandt and 'the man with the highest IQ in the world' give conflicting Bitcoin forecasts.
Four crucial US economic data points will shape Bitcoin sentiment this week.
Landmark FSRA license forces three-entity review for Binance in Abu Dhabi.
prediction market crypto stocks
CompanyAt close on December 5Pre-market overviewStrategy (MSTR)$178.99$182.00 (+1.68%)Coinbase (COIN)$269.73$275.35 (+2.08%)Galaxy Digital Holdings (GLXY)$25.51$25.93 (+1.65%)MARA Holdings (MARA)$11.74$12.00 (+2.21%)Riot Platforms (RIOT)$14.95$15.20 (+1.69%)Core Scientific (CORZ)$17.11$17.19 (+0.47%)
Crypto stock market opening race: Google Finance
