Asia Morning Briefing – 16/10/2025: QCP Says Liquidity, Not Fed Cuts, Is Driving Markets
QCP Capital’s latest note underscores a shift in global markets: liquidity, rather than interest rates, is now the key driver. Central bank balance sheets, cross-border capital flows, and institutional hedging are exerting greater influence on risk than the Fed’s next 25 basis points.
“Central bank purchases, de-dollarization flows, and institutional portfolio hedging are now the primary forces pushing gold higher, extending its role beyond a traditional inflation hedge,” the note said. Last weekend, the Bitcoin–gold correlation surged above 0.85, signaling synchronized flows across both assets.
Prediction markets reflect expectations of a gradual Fed easing cycle, favoring gold and digital assets over high-beta risk. On Kalshi, traders assign a 76% probability of three rate cuts in 2025, totaling 75 bps, aligning with JP Morgan’s “mid-cycle, non-recessionary” scenario. Fed Governor Michelle Bowman reinforced this outlook by calling for two additional cuts by year-end.
Bitcoin is trading within this liquidity-driven environment. Kalshi markets assign a 51% chance of BTC hitting $130,000 in 2025, 33% for $140,000, and 21% for $150,000, with even odds for $150,000 by mid-2026. The market is positioning for a slow, liquidity-fueled rally, rather than a speculative surge. Glassnode data shows heavy call option clustering at $130,000, suggesting short-term volatility could be amplified while anchoring resistance at that level.
Macro and on-chain signals point toward a steady, liquidity-backed advance, rather than an adrenaline-driven bull run, although unexpected news could still influence short-term swings.
Market Snapshot
- BTC: Trading above $110,500, down 2%, pressured by renewed U.S.–China trade tensions. A drop below $110,000 could open the way to $96,500–$100,000.
- ETH: Around $3,900, down 4%, as investors scale back amid macro uncertainty. Some remain optimistic Ethereum may eventually track gold’s performance.
- Gold: Near $4,141.81/oz, benefiting from safe-haven demand amid trade tensions and rate-cut expectations.
- Nikkei 225: Up 0.95%, following Wall Street gains led by strong bank earnings.
