Coinbase Institutional says Bitcoin may be primed for a December recovery as global liquidity conditions improve and the probability of a Federal Reserve rate cut climbs. In a recent research note the firm pointed to its global M2 money supply index — which tracks total outstanding fiat — and rising Fed cut odds (92% as of Dec. 4) as key reasons for expecting a rebound after October weakness.
Coinbase had anticipated downside earlier in the quarter but flagged a likely “December reversal” based on the money-supply signal. Even with improving macro indicators, market sentiment remains cautious: institutional and retail capital has been slow to return, and ETF inflows have not yet gathered momentum.
Market observers say two policy shifts in particular could spark a year‑end rally: an official Fed rate cut and the end of quantitative tightening (QT). Nic Puckrin, co-founder of Coin Bureau, told Cointelegraph that a December 10 rate cut combined with the end of QT would remove major policy headwinds and leave the market free to rally — barring any significant geopolitical shocks. He and others caution that investors will watch Fed Chair Jerome Powell’s post‑decision remarks closely for guidance on 2026 policy; any unexpectedly hawkish tone could trim upside.
Many traders view recent November selling as a reaction to earlier hawkish messaging from the Fed, and expect a rebound in December if policy turns more accommodative. Chris Kim, CEO of Axis, said his team is “leaning toward a recovery,” citing both macro drivers and technical factors: the market has retested the roughly $80,000 area and the 100‑week moving average, levels that can support a bounce. Incremental positives such as Vanguard opening ETF trading were also noted as confidence-building developments.
Speculation that National Economic Council Director Kevin Hassett could be tapped as Fed Chair in early 2026 is another factor some market participants see as bullish, since that move would likely signal a more dovish approach to monetary policy.
Bottom line: Coinbase and a range of analysts point to improving liquidity and rising Fed cut odds as potential catalysts for a December Bitcoin recovery. But they warn that Fed commentary, investor fear, and any major geopolitical event remain important downside risks that could limit gains or delay a full rebound.
