Is the December policy turning point approaching, and can the crypto market bottom out and rebound?

Bitcoin has recovered from the low of $80,000 to above $90,000, easing market pessimism. After experiencing two months of continuous adjustment since October, investors’ expectations for the year’s end trend have also warmed.

The upcoming December will become a critical month in determining the performance of crypto assets at year-end. Not only is the event schedule dense, but each major development points to the same conclusion: liquidity expansion, technological breakthroughs, and regulatory friendliness working together.

Ethereum Fusaka Upgrade Launching Soon

On December 4th (UTC+8), the Ethereum mainnet will undergo the Fusaka upgrade. This is not a routine patch but a comprehensive optimization of the data availability architecture, covering 11 EIPs.

The core innovation of the upgrade is the PeerDAS mechanism—each node only needs to store one-eighth of the blob data, with missing parts reconstructed cryptographically. This design, verified through random sampling, has a theoretical error probability as low as 1 in 10²⁰ to 10²⁴.

Improvements in data capacity are more straightforward: the number of blobs will increase from 9 to 15 (effective from BPO Fork1 on December 17th), which could reduce gas fees on Layer 2 networks like Arbitrum, Optimism, and Base by another 30%-50%, further lowering user costs.

The introduction of account abstraction will significantly enhance user experience. Ordinary accounts will support Web2-level features such as email + social recovery, key delegation, and batch operations for the first time, aiding user growth in social, financial, and gaming high-frequency applications.

Additionally, the completion of Verkle Trees paving the way for the “stateless client” era will shorten node synchronization time from weeks to hours, greatly reducing the cost for institutions to run full nodes.

Currently, Ethereum is priced at $3.11K. If this upgrade proceeds smoothly, it could inject new momentum into ETH’s subsequent performance.

Fed Rate Cut Expectations Surge in December

The latest data from CME FedWatch Tool shows that the probability of the Federal Reserve cutting interest rates by 25 basis points at the December 10th meeting has risen to 85%, a significant jump from 35% a week ago.

The direct factor driving this rapid increase is that November’s PPI data was much lower than expected, indicating continued easing of inflation pressures. Although Trump’s policy mix (tariffs + tax cuts + energy deregulation) may temporarily push prices higher, Fed officials have repeatedly stated that they aim for a soft landing before 2026 and will not rush to tighten.

If rates are indeed cut in December, a policy path opening for one or two more cuts in the first two quarters of 2026 will follow. The market will pre-trade expectations of rate cuts next year, which is favorable for risk asset valuation increases.

Polymarket data confirms this market consensus: 84% of funds are betting on a rate cut in December, with only 15% bearish. Bitcoin’s current price at $90.41K, along with improved liquidity conditions, is expected to provide upward support.

Fed Chair Nominee Influences Policy Direction

December may also bring another major news: confirmation of the Fed Chair nominee.

According to reports, Trump’s team has narrowed the list to five candidates, with Kevin Hasset currently leading. There are even rumors that his nomination announcement could be moved up to before Christmas. Polymarket data shows that the market assigns a 53% probability to Hasset’s nomination.

Hasset’s policy stance warrants attention. He previously served as Chair of the White House Council of Economic Advisers during Trump’s first term, representing a typical “rate-cutting” and “tax-reducing” advocate, publicly criticizing excessive rate hikes by his predecessor. More importantly, he holds a very positive attitude toward crypto assets, repeatedly stating in 2024 that “Bitcoin should be regarded as digital gold and incorporated into the national strategic reserve.”

If Hasset takes office, the Fed is highly likely to enter a “super-loose” cycle. Even if he is not ultimately selected, other candidates (such as Kevin Waugh, Chris Waller) have also been personally vetted by Trump, making the possibility of hawkish managers very slim. The trend toward a more friendly monetary policy stance by the Fed is inevitable.

Market Expectations vs. Reality

Galaxy Digital founder Mike Novogratz recently reiterated on a podcast that he still believes Bitcoin could reach $100,000 by the end of the year, but there will be significant selling pressure at that time, and the October crash has not yet fully dissipated investor psychology.

He also pointed out that as crypto policy frameworks become clearer and traditional financial institutions deepen their involvement, market structures will diverge, and tokens with strong fundamentals will be favored.

Whether the three December drivers—technological upgrades, liquidity easing, and policy shifts—can effectively stimulate the market remains to be seen as subsequent events unfold.