The Federal Open Market Committee (FOMC) opens its December 2025 session today, with the decision set for release tomorrow, December 10, at 2:00 p.m. ET.
Investors and traders are watching closely to see whether the central bank will continue its easing cycle or surprise markets by holding rates steady. As the final policy announcement of the year, the outcome carries considerable weight for crypto markets.
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The Rate Cut Scenario: What Happens if the Fed Delivers a 25 bps Cut in December
As the announcement nears, market expectations are leaning heavily toward a rate cut, with a 25-basis-point move seen as the most likely outcome. Data from CME FedWatch shows traders assigning an 89.4% chance to a quarter-point cut at the December 10 meeting.
In contrast, only about 10.6% of market participants believe the Fed will keep rates at the current 3.75%-4.00% range.
Fed Rate Cut Odds in December. Source: CME FedWatchIf the Fed proceeds with a cut, it would be the third in a row this year, following the adjustments in September and October. This would bring the interest rate down to 3.50%–3.75%.
September’s cut triggered a brief lift in the crypto market, with Bitcoin and Ethereum posting gains. At the same time, the US dollar dropped to its weakest level since early 2022.
Nonetheless, the broader market downturn muted the impact of the October cut. In December, volatility remains elevated, with sharp swings in both directions.
Still, many analysts argue that another cut at this stage would likely be viewed as “bullish” for crypto.
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For cryptocurrencies, such a standard adjustment is viewed as mildly bullish, as it enhances liquidity and encourages investment in risk assets like Bitcoin and Ethereum. Nonetheless, Crypto Rover explained that markets have already adjusted to that outcome, so the actual announcement is unlikely to cause a big reaction.
According to the analyst, the real catalyst for market movement will be Powell’s press conference, not the rate cut itself.
Meanwhile, some investors are even expecting a more aggressive 50-basis-point cut.
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This would be a strong policy signal, leading to rapidly expanding liquidity and further weakening of the dollar. While the probability of this scenario is low, it would likely have a stronger positive impact on crypto markets.
The No-Rate-Cut Scenario: Why a Fed Hold Could Hit Crypto Sentiment
Although few analysts predict it, the possibility that the Fed will hold rates cannot be ruled out. The rate decision arrives against a backdrop of disrupted economic indicators. The government shutdown halted key data releases from the Bureau of Labor Statistics. This scarcity has left Fed officials working with limited visibility.
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The Fed itself remains split. Powell has noted that policymakers are seeing pressure from both sides of the central bank’s mandate. After the last rate cut, the Chairman dampened hopes for further easing in December.
If this happens, crypto markets could likely react bearishly in the short term. A hold would temporarily weigh on sentiment and delay any bullish momentum that a cut might have triggered.
Despite the risks, long-term trends may still benefit crypto markets. Reports say the Fed intends to buy $45 billion in Treasury bills a month beginning January 2026. This policy could boost financial system liquidity can drive investment into risk assets.
Whether the Fed announces the widely expected 25-basis-point cut, surprises with a bigger reduction, or holds rates, its decision is likely to cause significant volatility in crypto markets. The subsequent press conference and forward guidance from Chair Powell will also play a key role, as traders focus on the outlook for future policy.
Source: https://beincrypto.com/federal-reserve-december-crypto-rate-cut/
