Bitcoin and Ethereum Drop as Fed Rate Cut Triggers Risk-Off Sentiment

I. Crypto Market Overview

Key Takeaways

Macro Environment

The Federal Reserve cut rates by 25 basis points to 3.50%-3.75%, signaling caution on further easing amid labor market concerns. The U.S. dollar weakened after the Fed's less hawkish outlook, supporting demand for Bitcoin and altcoins. Regulatory acceptance is rising, with the FSOC removing crypto from its financial vulnerabilities list, boosting long-term integration prospects.

Crypto Market

The crypto market saw broad declines over the past 12 hours, with Bitcoin down 4.4% to $97,474 and Ethereum falling 9.3% to $3,144, pressured by weak spot demand and ETF outflows. Altcoins also dropped, led by MYX Finance (-13.6%), Zcash (-4.0%), and MemeCore (-2.9%). The downturn was driven by risk-off sentiment following the Fed's rate cut and lack of new bullish catalysts.

Today's Outlook

Today, the FOMC will announce its interest rate decision at 2:00 pm, a key event likely to drive volatility across crypto and traditional markets. Germany will also release final November HICP inflation data, which may influence global risk sentiment and impact digital asset flows.

Fear and Greed Index

68.00% Annual Percentile

29 Fear

Total Crypto Market Cap

$3.13T

0.32%

Total Market Trading Volume

$137.86B

5.08%

Altcoin Season Index

0.00%

Quarterly Percentile

18 / 100

Total Futures Market Open Interest

4.53B

15.98%

Futures

879.27B

10.41%

Perpetuals

II. Industry Updates

Macro-economic Policies

The Federal Reserve cut its benchmark interest rate by 25 basis points to 3.50%-3.75%, marking the third reduction this year. This move aims to support the cooling labor market but signals a cautious approach to further easing, impacting Bitcoin and Ethereum by increasing short-term volatility and reducing risk appetite.

U.S. initial jobless claims unexpectedly rose to 236,000, surpassing forecasts and indicating potential labor market weakness. This data point increases expectations for a dovish Fed stance, which could support risk assets like Bitcoin if further rate cuts are anticipated.

The U.S. dollar weakened to multi-month lows against major currencies after the Fed's less hawkish outlook, while the Swiss franc strengthened following the SNB's decision to hold rates steady. A weaker dollar typically boosts Bitcoin and altcoin demand as investors seek alternative stores of value.

The Financial Stability Oversight Council (FSOC) removed cryptocurrencies from its list of financial system vulnerabilities, reflecting growing acceptance of digital assets. This shift supports the long-term integration of stablecoins and crypto into global financial markets, potentially enhancing DeFi liquidity.

Argentina's monthly inflation accelerated to 2.5% in November, with food prices outpacing the general index. Persistent inflation in emerging markets like Argentina continues to drive local demand for stablecoins and Bitcoin as hedges against currency devaluation.

Cryptocurrency Regulatory Trends

U.S. senators have advanced a comprehensive crypto market bill after meetings with major bank CEOs, aiming to clarify regulatory frameworks for digital assets and empower agencies like the SEC and CFTC. This move is expected to boost institutional confidence and market stability.

The SEC has approved DTCC to custody and tokenize stocks and real-world assets on blockchain, marking a major step toward integrating digital asset infrastructure into traditional financial markets and potentially accelerating institutional adoption.

The U.S. Financial Stability Oversight Council (FSOC) has removed cryptocurrencies from its list of systemic financial vulnerabilities, reflecting growing regulatory acceptance and potentially improving investor sentiment toward the crypto sector.

The CFTC has granted no-action relief to Polymarket, Gemini, PredictIt, and LedgerX, allowing these platforms to bypass certain swap recordkeeping rules if fully collateralized, which may encourage further development of regulated prediction markets and altcoin activity.

A recent Zodia Custody study highlights that stablecoins are now integral to Australia's financial system, supporting payments, treasury operations, and access to tokenized U.S. Treasuries, signaling increased regulatory recognition and mainstream adoption of stablecoins.

Zcash (ZEC): ZEC surged 16.4% in 24h to $459.2, with 24h trading volume up 37% to $1.18B. The rally is driven by renewed privacy coin interest and high volatility.

MYX Finance (MYX): MYX rose 12.4% in 24h to $3.09, with $36.9M trading volume. The protocol's cross-chain derivatives and recent ecosystem upgrades fueled the gain.

MemeCore (M): MemeCore climbed 7% in 24h to $1.55, with $21.4M volume. The price jump is linked to increased meme coin sector activity and on-chain participation incentives.

Smart Money Movements

A Bitcoin whale deposited $110 million USDC into Hyperliquid to increase long positions in Bitcoin and Solana, with current holdings of 140,094 ETH ($450M), 1,000 BTC ($91.8M), and 100,000 SOL ($13.6M).

eToro CEO Yoni Assia reinvested in Bitcoin after selling at the 2025 peak, demonstrating renewed confidence in digital assets with undisclosed but significant capital redeployment.

A major transaction of 1.44 million UNI tokens, valued at $7.98 million, was transferred between anonymous wallets, indicating substantial movement of capital within the Uniswap ecosystem.

Ethereum whales accumulated over 800,000 ETH since mid-October 2025, with large holders actively staking and transferring assets, reflecting increased institutional positioning worth over $2.5 billion.

Matrixport transferred 2,000 BTC, valued at approximately $180.33 million, to Binance, highlighting ongoing large-scale Bitcoin movements among institutional players.

Events to Watch

Dec 12 (Fri)

FOMC announces interest rate decision at 2:00 pm; Germany releases final November HICP data, preliminarily at 2.6% y/y.

Dec 13 (Sat)

Solana Breakpoint Conference continues in Abu Dhabi, featuring major ecosystem announcements and over 6,000 attendees.

Dec 15 (Mon)

SEC to decide on VanEck's Solana ETF application; Gensyn AI and NPRO tokens launch, expanding DeFi and NEAR Mobile ecosystem.

Dec 16 (Tue)

Helios IDO launches on Spores; US nonfarm payrolls data for November released, key for macro and crypto market sentiment.

Dec 17 (Wed)

Coinbase to unveil tokenized US stocks; Fogo FOGO token sale and blockchain presale commence, attracting investor attention.

Table of Contents