Positive Momentum in Cryptocurrency Markets with Fed’s December Decision

The 25 basis point rate cut implemented by the Fed in December has created a promising start for Bitcoin, Ethereum, and other crypto assets. This situation has increased investors' expectations for a net increase in liquidity heading into 2026.

According to an assessment by Delphi Digital, with the policy interest rate being adjusted to around 3.50% to 3.75% during the Fed's December meeting, the futures interest rate curve has started pricing in at least three additional rate cuts by the end of 2026. Analysts noted that interest rates are expected to drop to a low 3% level. These developments indicate a softening of policy conditions for risky assets that have been under pressure for a long time.

Changes on the liquidity front have become one of the topics that investors are closely monitoring. Delphi Digital emphasized that as of December 1st, with the end of the Quantitative Tightening (QT) process, the withdrawal of the Treasury General Account (TGA), and the complete depletion of Reverse Repo (RRP) needs, a net positive liquidity environment has emerged for the first time since early 2022. This situation could turn the policy from 2026, which previously negatively impacted the crypto markets, into a slight support stream.

At this point, liquidity in the dollar stands out as one of the most important dynamics affecting risk appetite. For the first time since the tightening that has lasted for the past two years, signs of recovery in dollar liquidity are being observed. With the end of QT, the pace of contraction in the Fed's balance sheet has ceased, TGA draws, and the zeroing of RRP provide extra support to the money markets. Delphi Digital predicts that all these developments present a positive outlook for crypto in the medium term and especially that price movements in 2026 may receive tighter macro support.

As a result, the critical points for investors to monitor will be the Fed's interest rate policy, liquidity changes, and market dynamics. Future price movements in the crypto markets appear to be closely related to these macroeconomic factors.