Welcome to the US Crypto News Morning Briefing - an essential summary of the day's top crypto developments.
Grab a cup of coffee as global markets enter an unprecedented period of friction as the era of synchronized economic cycles draws to a close. While the United States quietly restores liquidity, China remains deflated and Japan’s rising bond yields threaten to destabilize global capital flows. This has created a fragmented, unevenly paced adjustment that is testing investors and policymakers alike.
Crypto News of the Day: How the US, China and Japan Are Now Working Against Each Other
Global financial markets are entering a period of profound structural tension as long-held assumptions about synchronized economic cycles collapse.
Against this backdrop, investors now face a fragmented global system in which competing forces shape market behavior. The forces are:
Increasing US liquidity,
Chinese political constraints, and
Japanese economic pressures.
China's $18.9 trillion debt trap: why Beijing can't print money
In China, structural constraints limit the government's ability to implement large-scale monetary policy measures.
The scale of the problem extends to local government debt, which has reached ¥134 trillion ($18.9 trillion), spread across more than 4,000 financial instruments, and the property crash has exposed it and destroyed key revenue streams.
Unlike Japan, which used QE to stabilize its economy, China cannot liquidate its debt. Chinese law prohibits the purchase of primary market bonds in Article 29, and transferring capital abroad is severely punished. Debt serves as a political tool rather than an economic burden.
“Realization would break the control mechanism that holds the party together,” researcher Shanaka Anslem explains.
The result is persistent deflation, a slowdown in growth to around 4%, and a tightly controlled renminbi (RMB, China's official currency).
Analysts warn that this will prolong global disinflationary forces for years beyond consensus, a phenomenon Anslem calls “the long grind.”
The Fed's Lagging Balance Sheet: Hidden Risks in Post-QE Tightening
Meanwhile, the US faces its own structural challenges. The Federal Reserve officially ended its three-year and five-month quantitative tightening (QT) program on December 1, reducing its balance sheet by $2.43 trillion to $6.53 trillion.
The value of government securities fell to $4.19 trillion and the value of mortgage-backed securities to $2.05 trillion, unwinding the QE expansion during the pandemic by more than half.
Analyst Endgame Macro points out that the real danger lies not in the Fed's balance sheet itself but in the lag of its effects.
The austerity measures of the past two years have left households strapped, corporate bankruptcies have reached a 15-year high, and small businesses lack a safety net.
Even if interest rate cuts and eventually QE are implemented, policy cannot instantly reverse the stress already building in the economy.
The Fed will now move to Reserve Management Purchases (RMP), and officials are expected to buy $20-40 billion worth of Treasury securities per month starting in January 2026.
Shanaka Anslem explains that this quietly adds $480 billion in liquidity annually while keeping the mechanisms of QE off the balance sheet.
Bank reserves, already at $3 trillion, are growing, moving from ample to adequate, pointing to changes in risk assets, inflation concerns, and credit markets.
Japan's debt crisis: 30 years of ultra-low interest rates coming to an end
Across the Pacific, Japan is facing an economic reckoning that could reverberate in global markets, as recently revealed in the US publication Crypto News.
Japanese bond yields have risen, with the 20-year yield at 2.947%, the highest since 1998.
Meanwhile, 10-year yields at 1.95% are cited as critical by institutional stress models. The Bank of Japan now has unrealized losses of ¥28.6 trillion, equivalent to 225% of its capital base, and is technically insolvent.
Rising yields threaten $1.13 trillion worth of U.S. Treasury bills held by Japanese investors, as well as 1.2 trillion yen of trade debt that could unravel and trigger $500 billion in global capital outflows in 18 months.
“For 30 years, Japanese yields kept global interest rates artificially low. Today, that was broken. The world is moving to a completely different interest rate regime,” said one analyst in a post.
No soft landing: the world is moving to three-speed financial reform
The combination of these forces, namely US liquidity expansion, Chinese fiscal restraint and Japanese debt pressures, marks the end of synchronized cycles and the beginning of a multi-speed, fluctuating environment.
Analysts are warning of structural effects on credit markets, currencies, and even crypto. X, a market watcher, notes that a Japanese bond sale could trigger a Tether depeg, weaken Bitcoin, and force corporate crypto holders like MicroStrategy to liquidate, creating a cascading effect across digital assets.
Meanwhile, corporate bankruptcies are on the rise in the US, with 655 filings as of October 2025, the highest number in 15 years. Shanaka Anslem warns that the hit has only just begun, as shadow banks and private credit take on risks that traditional banks rejected, masking underlying vulnerabilities.
With tariffs, interest rate pressures, and fiscal tightening combining to create stress, analysts see 2026 as a year of structural adjustment.
Liquidity injections, market psychology, and geopolitical factors converge to determine winners and losers across asset classes.
The long tug-of-war manifests itself as a prolonged period of volatility driven not by cyclical errors but by structural, multi-decade changes in monetary policy, fiscal discipline, and global capital flows.
Forces reshaping global finance
Investors should follow:
US RMPs,
Fed interest rate cuts,
Payment defaults on shadow loans and
Repatriation of Japanese capital,
These forces are reshaping risk, return and liquidity in ways not seen since the era of low interest rates during the Global Financial Crisis (GFC).
Byte-Sized Alpha
Here's a summary of more US crypto news to watch:
Crypto fund investments surge to $716 million as Bitcoin, XRP, and Chainlink lead institutional change.
Coinbase plans full return to India, fiat support expected in 2026.
Bitcoin to $170,000: Reaganomics 2.0 will send BTC soaring in 2026.
Peter Brandt and the “world’s top intellectual” give conflicting Bitcoin predictions.
The significance of four key US economic data releases for Bitcoin sentiment this week.
A significant FSRA permit forces a three-unit renovation for Binance in Abu Dhabi.
Crypto equities pre-market -katsaus
CompanyDec 5 DecisionPreliminary 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%)
Opening the crypto market: Google Finance
