Coinbase Predicts Crypto Recovery as Liquidity Improves and Fed Rate-Cut Odds Rise
Coinbase Institutional sees the crypto market poised for a December rebound, driven by improving liquidity and macroeconomic shifts that could favor risk assets such as bitcoin.
In a Dec. 6 note, the firm pointed to the growing probability of a Federal Reserve rate cut next week—93% on Polymarket and 86% on CME FedWatch—as a key catalyst.
Liquidity conditions are also strengthening, according to Coinbase’s internal M2 index, which tracks monetary flows that influence asset prices. The firm had earlier forecast a weak November followed by a rebound using similar indicators.
Other potential tailwinds include the still-intact AI bubble and a weaker U.S. dollar, both supporting the market outlook.
Bitcoin, though lower on the week, recovered from its recent lows, buoyed by institutional developments such as Vanguard’s crypto ETF policy reversal and Bank of America permitting wealth advisers to allocate up to 4% of portfolios to crypto.
