Coinbase Institutional says Bitcoin could recover in December as global M2 liquidity improves and the odds of a Federal Reserve rate cut rise, though comments from Fed officials could cap gains. In a Friday research note, Coinbase wrote that crypto “could be poised for a December recovery as liquidity improves, Fed cut odds jump to 92% (as of Dec 4), and macro tailwinds build.”
The firm had forecasted October weakness ahead of a “December reversal” using its global M2 money supply index, which tracks total outstanding fiat. Despite improving macro conditions, sentiment remains dominated by fear, with institutional and retail capital hesitant to re-enter markets and ETF inflows yet to pick up.
Analysts say a Fed rate cut and the end of quantitative tightening could spark a “Santa rally” into year-end. Nic Puckrin, co-founder of Coin Bureau, told Cointelegraph that a December 10th cut combined with the end of QT would leave little standing in the way of a rally “bar any major geopolitical bombshell,” but added that investors will scrutinize Fed Chair Jerome Powell’s press conference for clues on 2026 policy and that any hawkish tone could dampen gains.
Others attribute November selling to earlier Powell hawkishness but expect a rebound in December. Chris Kim, CEO of Axis, said the team is “leaning toward a recovery,” citing macro drivers and technicals: the market has retested the ~$80K region and the 100-week average. He also noted incremental positives such as Vanguard allowing ETF trading.
Speculation that National Economic Council Director Kevin Hassett could be appointed Federal Reserve Chair in early 2026 is another bullish factor for some, as his appointment would likely signal a more dovish policy stance. Overall, Coinbase and market participants see improving liquidity and rising Fed cut odds as catalysts for a December recovery, while emphasizing that Fed commentary and investor fear remain key risks.
