Bitcoin News Today: Dovish Fed Hopes vs. Structural Risks: Bitcoin's December Crossroads

Bitcoin is poised for a pivotal December as Federal Reserve policy shifts and leadership changes loom large over the cryptocurrency market. With markets pricing in an 85% chance of a 25 basis point rate cut at the Fed's December meeting, the potential appointment of Kevin Hassett as the next Fed chair has intensified speculation about a dovish pivot that could catalyze a Bitcoin rebound. Hassett, a former National Economic Council director and vocal advocate for lower interest rates, is currently the leading candidate in prediction markets, with a 56% nomination probability. His alignment with President Trump's pro-growth agenda and ties to the crypto industry—Hassett served as an advisor to Coinbase—have fueled expectations of aggressive monetary easing.

The Fed's quantitative tightening program, which has reduced its balance sheet to $6.6 trillion from a peak of $9 trillion, has long constrained liquidity for risk assets like Bitcoin. Analysts argue that a shift toward easing could reverse this dynamic, injecting capital into markets and potentially propelling Bitcoin toward new highs. Cathie Wood of Ark Invest, for instance, reiterated her $1.5 million price prediction, citing improved liquidity conditions as a key driver. Similarly, Fundstrat's Tom Lee predicted a swift recovery from Bitcoin's recent $90,000 level, forecasting a return above $100,000 by December.

However, the path to a Bitcoin rebound is not without risks. Nobel laureate Paul Krugman recently attributed Bitcoin's 30% decline since October's peak to waning support for Trump's pro-crypto policies, framing the asset as a "barometer of risk sentiment" tied to the president's political fortunes. While Krugman criticized Bitcoin's lack of intrinsic utility, others, including BlackRock's ETF investors, see renewed buying opportunities as prices stabilize above $90,000. The interplay between Trump's trade policies, Fed decisions, and institutional adoption will likely determine whether Bitcoin's current consolidation phase evolves into a sustained bull run.

The potential appointment of Hassett adds another layer of complexity. His dovish stance, including calls for a 50 basis point December cut, could weaken the U.S. dollar and further bolster Bitcoin's appeal as an inflation hedge. Yet skeptics warn that a dovish Fed in a structurally strong economy might eventually push long-term rates higher, creating headwinds for crypto markets as analysts suggest. The market's reaction to Hassett's nomination, expected before Christmas, will likely set the tone for Bitcoin's trajectory in 2026.