Picture this: it’s Sunday night, Bitcoin is teasing $92,000, and every crypto trader on earth is glued to their screen waiting for Wednesday afternoon. That little press conference Jerome Powell gives at 2:30 p.m. ET could decide whether we finish 2025 with champagne or with margin calls.
I’ve been through more than a dozen of these FOMC meetings as a trader, and I can tell you the December one always feels different. It’s the last chance for the Fed to set the tone for the new year, and this time they’re walking an especially thin tightrope.
The Final Fed Meeting of 2025: Everything on the Table
The Federal Open Market Committee gathers December 9-10, but the real action happens on Wednesday the 10th. At 2:00 p.m. Eastern the policy statement drops, and thirty minutes later Powell faces the cameras. In trader speak, that 30-minute gap is pure agony.
What the Market Expects Right Now
As I write this, the CME FedWatch Tool shows an 87% probability of a 25 basis-point cut. That would bring the federal funds rate to 3.50%-3.75%, the lowest since early 2023. Only a 13% chance they hold steady, and virtually zero chance of a hike.
Frankly, that pricing feels about right. Inflation has cooled significantly from the 2022 peaks, the labor market is solid but not overheating, and growth is chugging along above trend. Classic Goldilocks setup for another dovish move.
“The committee judges that the risks to achieving its employment and inflation goals are roughly in balance.”
– Pretty much every Fed statement in 2025
Quantitative Tightening Is Officially Over
One detail that’s flying under the radar: December 1st marked the quiet end of QT. For years the Fed was letting up to $95 billion per month roll off its balance sheet. That faucet is now closed.
Think of it as removing the slow leak from the liquidity pool. It won’t flood markets overnight, but over the next few quarters the effect compounds. Historically, the end of tightening cycles has been rocket fuel for risk assets, and crypto tends to feel it first.
The Dot Plot and 2026 Projections – The Real Fireworks
December meetings are special because we get the Summary of Economic Projections – the famous dot plot. Each FOMC member anonymously marks where they think rates will be at the end of 2026, 2027, and longer run.
In September the median dot for 2026 sat at 3.4%. If this week’s plot shifts even 25 bp lower, markets will read it as “more cuts coming” and price in potentially four or five cuts next year instead of three. That single shift could add trillions in risk-on appetite.
- Lower dots → stronger “risk-on” signal
- Unchanged dots but softer inflation forecast → still bullish
- Higher dots or upward inflation revisions → instant risk-off
Why Crypto Traders Care More Than Stock Traders
Stocks love lower rates, sure. But crypto is leveraged to liquidity on steroids. When real yields fall and the Fed balance sheet stops shrinking, the marginal dollar often flows into the highest-beta assets first.
We saw it in 2020-2021. We saw it again after the March 2023 banking scare when the Fed quietly reopened the liquidity taps. Bitcoin tripled in twelve months both times.
Right now Bitcoin dominance is falling, Ethereum is outperforming, and Solana ecosystem coins are going parabolic on any given day. That’s classic late-cycle liquidity rotation behavior.
Possible Scenarios and Price Targets
Let’s game this out like traders actually do.
Scenario 1 – Dovish Delight (70% base case)
- 25 bp cut as expected
- Powell says “we’re approaching neutral but data dependent”
- Dot plot unchanged or slightly lower
- Bitcoin sprints to $95k-$100k by New Year rally
- Ethereum retests $3,800–$4,000
- Altcoins add another 20-40% in weeks
Scenario 2 – Hawkish Pause (20% chance)
- Fed skips this meeting
- Powell emphasizes “higher for longer if inflation reaccelerates”
- Bitcoin dumps toward $80k-$85k
- Heavy altcoin deleveraging, 20-30% drawdown in alts
Scenario 3 – Super-Dovish Surprise (10% chance)
- 50 bp cut (almost no one prices this)
- Powell hints March cut already on the table
- Bitcoin $110k before January 20th becomes the new meme
What Powell’s Tone Really Means
I’ve watched every single Powell press conference since 2018. The man is a master at sounding dovish while keeping options open. Pay attention to these verbal cues on Wednesday:
- If he repeats “we can be patient” multiple times → they’re done cutting for a while
- If he says “further gradual adjustments” → more cuts coming
- If he avoids mentioning the balance sheet → markets will assume more QE eventually
One sentence can move billions. Remember November 2021 when he dropped “transitory” and Bitcoin topped two weeks later? Yeah, words matter.
The Bigger Picture for 2026
Even if this week is only mildly positive, the structural setup for crypto next year looks ridiculously strong. We have:
- QT over and potentially reversing in 2026
- Possible fiscal stimulus under new administration
- Spot Ethereum ETFs maturing and possibly Solana ETFs in pipeline
- Corporate treasury adoption accelerating (MicroStrategy just raised another $2B)
- Global liquidity cycle turning higher (China, ECB, BoJ all easing)
In my experience, when the Fed stops tightening and the world prints money, Bitcoin doesn’t just go up, it goes parabolic with a few scary drawdowns along the way.
So buckle up. Wednesday isn’t just another FOMC meeting. It’s the pivot point between “pretty good 2025” and “absolutely legendary 2026.”
Whatever happens, I’ll be right here breaking it down the second Powell steps off the stage. See you on the other side.
