Projected Rate Cut and Liquidity Environment
Delphi Digital has announced a projected rate cut by the Federal Reserve in December 2025, amidst a positive net liquidity environment, affecting U.S. financial markets. This shift in monetary policy is poised to positively impact cryptocurrencies like Bitcoin and Ethereum, along with long-duration assets and large-cap stocks, due to improved market conditions.
The Federal Reserve aims to cut rates by 25 basis points in December 2025, reducing the federal funds rate to 3.5%-3.75%. This move follows the conclusion of quantitative tightening on December 1, 2025, establishing a positive net liquidity environment not seen since 2022. The rate cuts signal a strategic pivot to moderately support economic growth through easing financial conditions. Interest rates touching around 3% could enhance investor confidence in long-duration assets such as cryptocurrencies and equities.
"Forecasting a 25 basis points rate cut in December 2025, bringing the federal funds rate to about 3.5%-3.75%." — Delphi Digital
Market participants, including crypto analysts and investors, cautiously welcome this outlook, citing improved funding conditions. New York Fed President John C. Williams endorses the cuts, while Fed Chair Jerome Powell communicates balancing growth and inflation concerns without abrupt policy changes.
Impact on Cryptocurrency Revival
Historical policy easing phases, like those expected in 2026, often correlate with resurgence in cryptocurrency prices, as increased liquidity thrusts digital assets into a supportive environment.
According to CoinMarketCap, Bitcoin (BTC) is priced at $93,326.08, showcasing a market cap of 1.86 trillion. BTC's trading volume declined by 8.04% in the last 24 hours, with the price moving down by 0.10% over the same period.
Experts from Coincu highlight that impending rate cuts, along with liquidity improvements, can bolster demand for structurally strong tokens like BTC and Ethereum. Enhanced market conditions due to easing rates may promote speculative growth, leading to higher valuations for resilient digital assets.