\u201cWith quantitative tightening [QT] ending, the Fed is back in the bond market, and the drain of cash from markets may be behind us,\u201d Coinbase Institutional stated on Wednesday before adding, \u201cThat\u2019s usually good for risk-on assets like crypto.\u201d<\/p>\n
The findings came in the company\u2019s monthly outlook report, which took a deep dive into why Bitcoin and crypto markets performed so poorly last month.<\/p>\n
Bitcoin has severely underperformed<\/a> US equities on a risk-adjusted basis, falling over three standard deviations below its 90-day average, while the S&P 500 declined only one standard deviation, it reported.<\/p>\n \u201cWhile fear remains elevated, we believe conditions favor a reversal in December.\u201d<\/p>\n Buy the dip?<\/p>\n With quantitative tightening ending, the Fed is back in the bond market and the drain of cash from markets may be behind us. That\u2019s usually good for risk-on assets like crypto.<\/p>\n So why did BTC dump?<\/p>\n \u2022 BTC broke major bull market support bands \u2014 Coinbase Institutional (@CoinbaseInsto) December 2, 2025<\/a><\/p>\n\n There were several key challenges as the market digested October\u2019s liquidation that hit altcoins particularly hard, the firm noted.\u00a0Spot ETF flows have turned markedly negative, with November posting record cumulative outflows while stablecoin supply was contracting with the weakest 30-day momentum since 2023.<\/p>\n Long-term holders were distributing coins rather than accumulating, and digital asset treasury vehicles are trading below net asset values for the first time since 2024.<\/p>\n The report also discussed concerns about a \u201cK-shaped\u201d economic recovery where AI-driven job displacement could boost corporate profits while eroding personal income stability, though evidence that this is impacting crypto remains weak.<\/p>\n \u201cWe think sidelined cash (e.g., sizable money\u2011market balances) could still pivot into regulated BTC vehicles when conditions stabilize.\u201d<\/p>\n It all paints a gloomy picture, but macroeconomic fundamentals remain stronger<\/a> than ever.\u00a0Coinbase echoed the same sentiment from October in that \u201cfull market stabilization will likely take a few months.\u201d<\/p>\n However, it stated that \u201cconditions could be primed for a reversal in December, as we believe the Federal Reserve could cut rates and unlock some inflows.\u201d<\/p>\n Reformed hedge-fund manager James Lavish echoed the sentiment, stating that he was \u201cbearish on the Fed and what they continue to do to the value of the dollar.\u201d<\/p>\n The US Dollar Index (DXY), which values the greenback against a basket of currencies, has plummeted more than 10% since the beginning of this year. It is likely to tank further when the Fed starts<\/a> quantitative easing (QE) and injects liquidity.<\/p>\n In the last 16 years, the Fed has added a total of $8.8 trillion of liquidity to markets and removed a total of just $3.2 trillion before calling *uncle* for the second time. So when people ask why I am so bullish on Bitcoin, it is simple. I am bearish on the Fed and what they\u2026 pic.twitter.com\/Z9cY2J6JDE<\/a><\/p>\n \u2014 James Lavish (@jameslavish) December 2, 2025<\/a><\/p>\n\n It appears to be already underway, as the Fed has just injected $13.5 billion into the banking system through overnight repos, the second-largest spike since the COVID-19 pandemic, according<\/a> to data from the St. Louis Fed.<\/p>\n The post Coinbase Institutional Sees December Reversal Despite Bitcoin\u2019s Brutal November<\/a> appeared first on CryptoPotato<\/a>.<\/p>","protected":false},"excerpt":{"rendered":" \u201cWith quantitative tightening [QT] ending, the Fed is back in the bond market, and the drain of cash from markets may be behind us,\u201d Coinbase Institutional stated on Wednesday before adding, \u201cThat\u2019s usually good for risk-on assets like crypto.\u201d The findings came in the company\u2019s monthly outlook report, which took a deep dive into why […]<\/p>\n","protected":false},"author":0,"featured_media":117698,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[4],"tags":[],"class_list":["post-117697","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-discovery"],"_links":{"self":[{"href":"https:\/\/mycryptomania.com\/index.php?rest_route=\/wp\/v2\/posts\/117697"}],"collection":[{"href":"https:\/\/mycryptomania.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/mycryptomania.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"replies":[{"embeddable":true,"href":"https:\/\/mycryptomania.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=117697"}],"version-history":[{"count":0,"href":"https:\/\/mycryptomania.com\/index.php?rest_route=\/wp\/v2\/posts\/117697\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/mycryptomania.com\/index.php?rest_route=\/wp\/v2\/media\/117698"}],"wp:attachment":[{"href":"https:\/\/mycryptomania.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=117697"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/mycryptomania.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=117697"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/mycryptomania.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=117697"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}
\n\u2022 Options traders\u2026 pic.twitter.com\/1C8mxtemun<\/a><\/p>\nBreaking Down The Breakdown<\/h2>\n
Bearish on The Fed<\/h2>\n