Coinbase Institutional said crypto markets could be poised for a recovery in December, citing improving liquidity and a change in macroeconomic conditions that could favor risky assets like bitcoin. .
In a market note shared on Dec. 6, the firm highlighted the growing likelihood of a Federal Reserve rate cut next week, now rated at 93% on Polymarket and 86% on CME’s FedWatch, as a central factor.
Liquidity conditions are also improving, based on Coinbase’s internal M2 index, which tracks monetary flows impacting asset prices. The company previously predicted a weak November followed by a rebound, citing similar indicators.
The note also points to other tailwinds that could support the recovery, including the expected bursting of the AI bubble, which did not occur, and a weaker U.S. dollar.
Although it remained down for the week, bitcoin managed to rally from its worst levels, perhaps fueled by institutional headlines like Vanguard’s crypto ETF policy reversal, with Bank of America giving the green light to its wealth advisors to recommend allocations of up to 4% of portfolios to crypto.
