Monetary Policy

Clear Street Managing Director Owen Lau pointed out that the Fed's rate cut力度 in 2026 will determine whether retail investors return to the crypto market. Currently, the cryptocurrency fear and greed index has been in the "extreme fear" zone since December 13, with a score of only 23 on Wednesday. Bitcoin has plummeted 29.3% from its October all-time high of $125,100, with the current price hovering around $88,439.

The Federal Reserve's December Federal Open Market Committee (FOMC) meeting minutes released on December 31st show that there was significant disagreement within the committee on whether to cut interest rates. Ultimately, the decision was made with a 9 to 3 vote to cut rates by 25 basis points, bringing the federal funds rate target range to 3.5% to 3.75%. This is the most dissenting vote count since 2019. The minutes reveal that although most officials believe that further rate cuts may be appropriate if inflation declines as expected, some officials expressed strong reservations about the pace of future easing, even stating that this rate cut decision was "very balanced" and could have supported holding rates steady. On the market side, according to CME's "FedWatch" tool, as of December 31st, traders believe there is an 85.1% probability that the Fed will keep rates unchanged in January 2026, indicating a cautious outlook for future policy shifts. This contradictory set of minutes casts a shadow of uncertainty over the global macro markets in 2026, especially for risk assets like Bitcoin and Ethereum, which are highly sensitive to such developments.