The US Federal Open Market Committee (FOMC) will hold its December 2025 meeting today, with a decision expected to be announced tomorrow, December 10th at 2pm ET.
Investors and traders are watching closely to see whether the central bank will continue its easing cycle or surprise markets by leaving interest rates unchanged. As the last policy announcement of the year, this result carries considerable weight for the cryptocurrency market.
Rate cut scenario: What would happen if the Fed cut rates by 25bps? in december
As the announcement nears, market expectations are leaning heavily toward a rate cut, with a 25 basis point (bp) cut seen as the most likely outcome. Traders have an 89.4% chance of a quarter-point rate cut at the Dec. 10 meeting, according to CME FedWatch data.
By contrast, only about 10.6% of market participants believe the Fed will keep interest rates in the current range of 3.75% to 4.00%.
Odds of Fed rate cut in December. Source: CME FedWatch
If the Fed continues to cut rates, it will be the third consecutive rate cut this year, following adjustments in September and October. This will reduce interest rates to 3.50% to 3.75%.
September’s interest rate cut triggered a temporary rally in the crypto market, with Bitcoin and Ethereum rising. At the same time, the US dollar fell to its lowest level since early 2022.
Nevertheless, the overall market weakness weakened the impact of October’s rate cut. Volatility continues to be high in December, with sharp swings in both directions.
Still, many analysts argue that further rate cuts at this stage are likely to be seen as “bullish” for cryptocurrencies.
“If you don’t think this is bullish for Bitcoin or risk assets, you haven’t been paying attention. Prepare for volatility and prepare for a green light,” the analyst said.
In the case of cryptocurrencies, such standard corrections are seen as somewhat bullish as they increase liquidity and encourage investment in riskier assets such as Bitcoin and Ethereum. Nevertheless, Crypto Rover explained that the actual announcement is unlikely to cause a major reaction as the market has already adapted to the outcome.
The analyst said the real catalyst for the market movement was Powell’s press conference, not the rate cut itself.
“Bank of America expects Mr. Powell to signal ‘reserve management purchases,’ meaning new liquidity injections to stabilize funding stress at small banks. This will help normalize SOFR and support liquidity across markets. If Mr. Powell sounds dovish and inflation is “If he says things are calming down, tariffs are not changing trends, and labor is softening, that would give the market the green light to expect more rate cuts. But if he sounds as hawkish as he did at the last FOMC meeting, Bitcoin and Alternatives will be in for a dump,” he said.
Meanwhile, some investors are hoping for a more aggressive 50 basis point rate cut.
I told them that a 50 basis interest rate cut was coming.
— Grant Cardone (@GrantCardone) December 8, 2025
This would be a strong policy signal, leading to rapid liquidity expansion and further dollar weakness. Although this scenario is unlikely to materialize, it could have a stronger positive impact on the crypto market.
No rate cut scenario: why the Fed’s stay on hold could hurt crypto sentiment
Few analysts expect that, but the possibility of the Fed holding interest rates steady cannot be ruled out. This interest rate decision was made against a backdrop of confusion in economic indicators. government shutdown The Bureau of Labor Statistics has stopped releasing key data. This scarcity has left Fed officials working with limited visibility.
“What do you do if you’re driving in fog? Slow down,” Federal Reserve Chairman Jerome Powell said in October.
The Fed itself remains divided. Powell noted that policymakers are feeling pressure from both sides on the central bank’s mission. After the last rate cut, the Fed chairman dampened expectations for further easing in December.
“There were very different views on how to proceed in December. A further reduction in policy rates at the December meeting is not a foregone conclusion and is far from a conclusion,” he said.
If this happens, the cryptocurrency market may exhibit a bearish reaction in the short term. A hold would temporarily weigh on sentiment and slow any bullish momentum that a rate cut could spark.
Despite the risks, long-term trends can still benefit the crypto market. According to reports, the Fed plans to purchase $45 billion in Treasury bills each month starting in January 2026. This policy could increase liquidity in the financial system and encourage investment in risk assets.
“This is going to inject a lot of liquidity into the market. This means one thing only: quantitative easing is back, but this time we won’t call it quantitative easing,” Lark Davis said.
Whether the Fed announces a widely expected 25 basis point rate cut, surprises with a larger rate cut, or leaves rates unchanged, its decision is likely to cause significant volatility in crypto markets. The subsequent press conference and Chairman Powell’s future guidance will also play an important role as traders focus on the outlook for future policy.
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