Coinbase Institutional has said crypto markets could be poised for a rebound in December, citing improved liquidity and a shift in macroeconomic conditions that could favor risk assets like bitcoin .
In a market note shared Dec. 6, the firm pointed to rising odds of a rate cut by the Federal Reserve next week, now priced at 93% on Polymarket and 86% on CME’s FedWatch, as a key driver.
Liquidity conditions are also improving, based on Coinbase’s internal M2 index, which tracks money flows that affect asset prices. The firm had previously predicted a weak November followed by a recovery, citing similar indicators.
The note also highlighted additional tailwinds that could support the rally, among them the expected bursting of the so-called AI bubble, which has not happened, and a weaker US dollar.
Although it remained lower for the week, bitcoin managed to rally from its worst levels, perhaps driven by institutional headlines such as Vanguard’s crypto-ETF policy change, with Bank of America giving its wealth advisors the go-ahead to recommend allocations of as much as 4% of portfolios in crypto.
