Bitcoin News Today: Fed's Policy Split Traps Crypto in Fragile Stalemate

The Federal Reserve's potential December rate cut has become a focal point for global markets, with officials divided on the urgency of easing monetary policy amid mixed economic signals. Boston Fed President Susan Collins, a voting member of the policy committee, stated there is "no strong need" for another rate reduction in December, emphasizing that the two cuts since August have already tilted policy toward inflation control. However, recent data and shifting rhetoric among Fed leaders suggest otherwise. The September jobs report, released after a delayed government shutdown, showed 119,000 jobs added-surpassing expectations-and an uptick in the unemployment rate to 4.4%, fueling trader speculation that a December cut now has a 35% probability. This tension between economic indicators and central bank messaging has created a fractured narrative, with officials like New York Fed President John Williams and Fed Governor Christopher Waller advocating for further easing to address stagflationary risks.

The debate reflects deeper divisions within the Federal Open Market Committee (FOMC). Some officials argue that monetary policy remains tight, citing robust capital markets, while others point to strained conditions in sectors like housing. Compounding the uncertainty is the lack of recent employment and inflation data for the December meeting, forcing policymakers to rely on older metrics amid a record 33-day government shutdown. Former Cleveland Fed President Loretta Mester hinted that Chair Jerome Powell might frame a December cut as an "insurance move," signaling caution rather than a sustained easing cycle.

Cryptocurrency markets, historically sensitive to Fed policy shifts, have reacted with volatility. Bitcoin (BTC) dipped below $80,000 earlier this week amid a 70% surge in odds of a December rate cut, as per CME FedWatch data. Institutional investors remain cautious, with Bitcoin spot ETFs seeing $3 billion in November outflows and derivatives positioning reflecting defensive strategies. Ethereum (ETH) has fared slightly better, rebounding to $2,850 after large-scale institutional accumulation by entities like BitMine, which holds over 3.6 million ETH. According to analysis, Ethereum has seen modest gains. Altcoins like XRP and Solana have seen modest gains, buoyed by improved risk-on sentiment and anticipation of liquidity inflows if the Fed delivers a cut.

The crypto venture capital landscape also shows mixed signals. Q3 2025 saw $4.6 billion in crypto VC activity, the second-highest quarter since the FTX collapse, driven by U.S.-based firms despite challenges from AI startups and high interest rates. However, ETF inflows into spot Bitcoin products have outpaced early-stage VC investments, with pension funds and hedge funds preferring liquid vehicles over speculative projects. This shift underscores a broader trend of institutional risk mitigation, complicating recovery efforts for smaller crypto firms.

As the December 10 meeting approaches, markets remain in a holding pattern. A rate cut could temporarily ease pressure on risk assets, but on-chain data indicates Bitcoin's recovery is fragile, with 6.3 million BTC currently trading below cost bases. Analysts caution that a "hawkish cut"-a reduction without clear forward guidance-might fail to reignite investor confidence, leaving Bitcoin trapped between $82,000 and $97,000 resistance levels. For now, traders are bracing for Powell's press conference, where his framing of the Fed's move could determine whether crypto markets experience a rebound or continue their consolidation phase.