Coinbase Institutional has suggested that the crypto markets might be on track for a recovery in December. They point to better liquidity and shifts in economic conditions that could favor risk assets such as bitcoin .
In a market note shared Dec. 6, the firm highlighted the increased likelihood of a Federal Reserve rate cut next week, currently estimated at 93% on Polymarket and 86% on the CME’s FedWatch, as a significant factor.
Liquidity conditions are also reportedly improving, according to Coinbase’s internal M2 index, which monitors monetary flows affecting asset prices. The firm had previously anticipated a sluggish November followed by a recovery based on similar metrics.
The note mentioned additional positive factors that might aid the rally, including the anticipated collapse of the so-called AI bubble that hasn’t yet transpired and a declining U.S. dollar.
Despite being lower for the week, bitcoin was able to rebound from its lowest points, possibly driven by institutional news such as Vanguard’s change in crypto ETF policy and Bank of America permitting its wealth advisors to recommend crypto allocations of up to 4% of portfolios.
