Coinbase Sees Crypto Rebound Ahead Amid Improved Liquidity and Fed Rate-Cut Odds
Coinbase Institutional expects the crypto market to recover in December, citing improving liquidity and macroeconomic conditions that favor risk assets like bitcoin.
In a Dec. 6 note, the firm highlighted the rising likelihood of a Federal Reserve rate cut next week—93% on Polymarket and 86% on CME FedWatch—as a primary driver for potential gains.
Liquidity is also improving, based on Coinbase’s internal M2 index, which tracks monetary flows impacting asset prices. The firm had previously predicted a weak November followed by a rebound using similar indicators.
Additional tailwinds include the ongoing AI bubble and a weaker U.S. dollar, both of which could support a market uptick.
Bitcoin, while lower on the week, bounced from recent lows, likely helped by institutional developments such as Vanguard’s crypto ETF policy reversal and Bank of America allowing wealth advisers to allocate up to 4% of portfolios to crypto.
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