Coinbase Institutional has said crypto markets may be poised for a recovery in December, citing improving liquidity and a shift in macroeconomic conditions that could favor risk assets like bitcoin. .
In a market note shared on December 6, the firm noted as a central factor the increasing odds of a Federal Reserve rate cut next week, now valued at 93% on Polymarket and 86% on CME’s FedWatch.
Liquidity conditions are also improving, according to Coinbase’s internal M2 index, which tracks monetary flows that impact asset prices. The company had previously forecast a weak November followed by a rebound, citing similar indicators.
The note also pointed to additional tailwinds that could support the rally, including the expected bursting of the so-called AI bubble, which has not occurred, and a weaker US dollar.
Although it remained lower throughout the week, bitcoin managed to rise from its worst levels, perhaps driven by institutional headlines such as Vanguard’s crypto ETF policy reversal, and Bank of America giving its wealth advisors the green light to recommend allocations of up to 4% of portfolios to crypto.
