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Bitcoin Updates: Diverging Fed Policies Leave Crypto Stuck in Unstable Deadlock

Bitcoin Updates: Diverging Fed Policies Leave Crypto Stuck in Unstable Deadlock

Bitget-RWA2025/11/26 02:30
By:Bitget-RWA

- Fed officials split on December rate cut urgency, with Collins opposing further easing while others cite stagflation risks. - Mixed economic data and 33-day government shutdown delay key metrics, forcing reliance on outdated indicators for policy decisions. - Crypto markets react to Fed uncertainty: Bitcoin dips below $80k amid 70% cut odds, while Ethereum rebounds on institutional buying. - Institutional investors favor liquid Bitcoin ETFs over VC projects, reflecting risk mitigation trends despite $4.6

The possibility of a Federal Reserve rate cut in December has captured the attention of global investors, as policymakers remain split on whether monetary easing is warranted given conflicting economic data. Boston Fed President Susan Collins, who votes on policy decisions, remarked there is "no compelling reason" to lower rates again in December,

have already shifted policy toward curbing inflation. Yet, recent economic reports and changing tones from Fed officials are challenging this stance. The September employment report, , revealed 119,000 new jobs—exceeding forecasts—and a rise in unemployment to 4.4%, prompting traders to assign a 35% chance to a December rate cut. This disconnect between economic trends and central bank communication has led to a divided outlook, and Fed Governor Christopher Waller supporting additional easing to counter stagflation concerns.

This ongoing debate highlights significant rifts within the Federal Open Market Committee (FOMC). Some members maintain that policy is still restrictive,

, while others highlight stress in areas like real estate. The uncertainty is heightened by the absence of fresh jobs and inflation figures for the December gathering, following a record-setting 33-day government closure. Former Cleveland Fed President Loretta Mester suggested Chair Jerome Powell may present a December cut as a "precautionary step," indicating prudence rather than a shift to ongoing easing.

Digital asset markets, which have historically responded sharply to Fed policy changes, have experienced heightened volatility.

(BTC) as the likelihood of a December rate cut surged to 70%, . Major investors remain wary, and derivatives markets showing defensive positioning. (ETH) has performed somewhat better, climbing back to $2,850 after significant institutional buying by groups like BitMine, which now holds over 3.6 million ETH. , Ethereum has posted modest advances. Alternative coins such as and have also achieved slight increases, and hopes for increased liquidity if the Fed opts for a cut.

The crypto venture capital sector is also sending mixed signals.

, marking the second-strongest quarter since the FTX collapse, largely driven by U.S. firms despite competition from AI startups and elevated interest rates. However, inflows into spot Bitcoin ETFs have , with pension and hedge funds favoring more liquid assets over riskier ventures. This trend highlights a broader move toward risk reduction among institutions, complicating the recovery for smaller crypto startups.

With the December 10 Fed meeting nearing, markets are largely in wait-and-see mode.

, but blockchain data shows Bitcoin's rebound remains fragile, as 6.3 million are currently trading below their acquisition cost. —a reduction without clear guidance for future moves—may not restore investor optimism, potentially keeping Bitcoin stuck between resistance at $82,000 and $97,000. For now, traders are awaiting Powell's upcoming press conference, where his remarks could determine whether crypto markets recover or continue to consolidate.

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Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.

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