TLDR:
- Powell speaks on December 1 as the Fed ends three years of quantitative easing programs at the same time
- The market is pricing in an 87 percent chance of a rate cut in December ahead of the upcoming FOMC meeting decision
- Altcoins outperformed Bitcoin for months after 2019 QT ended with similar market structure today
- Labor market weakness versus inflation focus will determine whether the crypto rally continues or reverses
Federal Reserve Chairman Jerome Powell will give a major economic speech on December 1st. The speech comes just days before the meeting of the Federal Open Market Committee. Markets have already priced in an 87 percent probability of a rate cut in December.
Powell’s comments are likely to set the tone for cryptocurrency markets heading into 2025.
Fed policy shift coincides with end of quantitative easing
The Federal Reserve officially ends its quantitative easing program on December 1st. The central bank has been running QT for over three years.
Historical patterns suggest significant implications for digital assets. Last time QT ended in 2019, alternative cryptocurrencies outperformed Bitcoin for several months.
That strength also persisted during the 2020 crash. As quantitative easing resumed, altcoins entered an extended uptrend. The current market structure reflects the previous period. Currency traders are watching for indications of when the Fed might restart asset purchases.
The timing creates a unique moment for crypto markets. Powell’s speech lands on the same day QT ends. Global monetary conditions are also changing. Japan, China and Canada have already begun to ease or are preparing policy adjustments.
Any signal from Powell that is in line with global easing could boost liquidity expectations. Cryptocurrency markets typically react more quickly than traditional assets to such changes.
The earlier Powell speech took a hawkish stance and immediately weakened Bitcoin momentum. This time, market participants are looking for different signals.
Labor market data could lead to higher rate cuts
Powell’s focus during the speech will be critical to price action in the near term.
If he emphasizes weakening labor market conditions over inflation concerns, interest rate reduction the probability becomes almost certain. That change alone could support the current relief rally in Bitcoin and altcoins.
The market faces two clear scenarios.
A signal indicating room for further rate cuts would likely strengthen crypto prices. Conversely, if Powell suggests the Fed can’t cut much further, the recent rally could return.
The whole arrangement depends on how the central bank designs its next policy phase.
Inflation stability through tariffs and other policy tools remains a key variable. Unemployment continues to move towards roughly the same levels. If both trends hold, markets will expect more rate cuts through 2026. However, any focus on rising inflation could trigger a downturn.
Powell’s comments on Dec. 1 come at a pivotal moment for digital assets.
Bitcoin and altcoins have shown strength in recent weeks. The speech will either confirm or challenge current market positioning. Traders are braced for immediate volatility following his comments.
