Coinbase Forecasts Crypto Recovery in December

Coinbase Institutional, a division of the leading cryptocurrency exchange, has forecasted a potential recovery for crypto markets in December, driven by improving global liquidity and favorable shifts in U.S. monetary policy. The prediction, outlined in a market note released on December 5, comes after months of volatility that saw bitcoin underperform relative to broader equities, with the cryptocurrency trading below key technical supports earlier in the fall.

Analysts at Coinbase pointed to surging expectations for a Federal Reserve interest rate cut at its December 18 meeting as a primary catalyst. Market pricing now reflects probabilities of around 90 percent for the cut, up sharply from prior weeks, according to tools like the CME FedWatch and Polymarket. This anticipated easing could bolster risk assets, including bitcoin, by reducing borrowing costs and encouraging investment in higher-yield opportunities. "It's beginning to look a lot like a recovery," the firm stated in its report. "We think crypto could be poised for a December recovery as liquidity improves, Fed cut odds jump to 92 percent as of December 4, and macro tailwinds build."