The withdrawn guidance required uninsured banks to follow the same limitations as federally insured institutions. As a result, many crypto-friendly banks were effectively barred from Fed membership and access to core payment systems. The Fed now acknowledges that both the financial system and regulatory understanding have materially evolved since that framework was introduced.

Fed Explains Why The 2023 Crypto Guidance Was Withdrawn

In its statement, the Federal Reserve said the 2023 guidance no longer reflected current risks or product structures. The central bank emphasized that innovation across financial services has accelerated. Regulatory tools designed two years ago are no longer sufficient to address today’s market dynamics.

Crucially, the Fed signaled a shift away from blanket activity bans. Instead of prohibiting certain crypto-related services outright, the updated approach focuses on how risks are managed. This change is especially significant for state-chartered banks that were previously excluded from crypto services by default.

Trump: “The Fed Chair Should Consult Me on Interest Rates”

Custodia Bank Case Highlights Regulatory Friction

Custodia Bank CEO Caitlin Long publicly welcomed the decision. She stated that the now-withdrawn guidance was cited when the Fed denied Custodia’s application for a master account. Such accounts allow banks to settle payments directly in central bank money, rather than through intermediaries.

Long argued that the Fed relied on the guidance even before it was formally finalized. According to her, leadership changes inside the central bank have weakened the anti-crypto stance that previously dominated supervisory decisions. Her remarks underscore growing internal divergence within US financial regulators.

@federalreserve withdraws 2023 policy statement and issues new policy statement regarding the treatment of certain Board-supervised banks that facilitates responsible innovation: https://t.co/5s1I9LO9EF

— Federal Reserve (@federalreserve) December 17, 2025

New Fed Framework Creates Pathway For Bank Innovation

Alongside withdrawing the old policy, the Federal Reserve introduced a new framework. Under this model, both insured and uninsured state member banks can pursue innovative activities, including crypto-related services, if they meet defined risk-management standards. The emphasis shifts from what banks do to how they do it.

Fed Vice Chair for Supervision Michelle Bowman said the goal is to keep the banking sector safe while ensuring it remains modern and competitive. However, the decision was not unanimous. Fed Governor Michael Barr dissented, warning that easing restrictions could encourage regulatory arbitrage and disrupt equal treatment among banks.

Market And Investor Behavior Implications

The policy reversal sends a clear signal that regulatory hostility toward crypto is easing in the US banking system. Banks can now explore custody, payment, and settlement services without automatic exclusion. This shift may also reduce perceived regulatory risk for institutional investors.

From a behavioral perspective, the softer regulatory tone could gradually improve risk appetite. Interest in stablecoins, tokenized deposits, and crypto payment rails is likely to recover. Over the medium term, this decision strengthens confidence in the integration of traditional finance and digital assets.

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Key Macroeconomic Events To Watch

The week begins with a strong focus on the US labor market. On Tuesday, the Non-Farm Payrolls report and unemployment rate will offer fresh insight into economic momentum. A softer jobs print could reinforce expectations of looser financial conditions, while a strong outcome may revive rate-hike concerns.

On Wednesday, investors will turn their attention to the Eurozone’s annual inflation data. A reading in line with expectations would support the European Central Bank’s cautious stance. Thursday’s ECB rate decision stands out as one of the week’s most important events, even though no rate change is anticipated. Markets will closely analyze the policy statement for future guidance.

Later in the week, US inflation data takes center stage again. The annual CPI and Core PCE Price Index will serve as critical indicators for the Federal Reserve’s preferred inflation trend, potentially impacting bond yields and the US dollar.

Crypto Market Developments In Focus

From a digital asset perspective, one of the most closely watched events is the expected SEC meeting focused on Bitcoin and the broader crypto market. Any regulatory signals from this meeting could have immediate implications for market sentiment.

On Wednesday, Binance is set to delist FIS, REI, and VOXEL, a move that may increase short-term volatility for the affected tokens. The same day, Coinbase is scheduled to release an announcement, which investors are monitoring closely for strategic or product-related updates.

US housing data, including existing home sales, along with the University of Michigan’s inflation expectations and consumer sentiment surveys, may also indirectly influence crypto markets by shaping broader risk perceptions.

Weekly Highlights At A Glance

• Monday: SEC meeting on Bitcoin and crypto assets

• Tuesday: US Non-Farm Payrolls and unemployment rate

• Wednesday: Binance delistings and Eurozone CPI data

• Thursday: ECB interest rate decision and US annual CPI

• Friday: Bank of Japan rate decision and US Core PCE data

In addition, a total of five Federal Reserve speakers are scheduled throughout the week. Their remarks could trigger short-term market volatility as investors reassess interest rate expectations. Overall, the coming days are set to be decisive for both traditional markets and the crypto ecosystem, as data-driven signals guide the next market move.

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According to data provided by the CME FedWatch tool, the target rate range could be lowered to 350–375 basis points, while the likelihood of keeping the current policy range of 375–400 basis points stands at 29%.

This article may also catch your attention: Bitcoin (BTC) Recovery Gains Strength: Will the Uptrend Continue?

Factors Strengthening Expectations

Statements made by New York Fed President John Williams indicate that short-term adjustments to interest rates may be possible, further boosting market expectations of a rate cut.

Data flow disruptions in the United States are creating uncertainty in the FED’s decision-making process. Although recent minutes suggest differing views within the Fed regarding a potential rate cut, the overall sentiment points toward a policy easing at the final meeting of the year.

A higher probability of a rate cut has positively reflected on Bitcoin and altcoin markets, increasing appetite for risk assets. However, market participants remain cautious in light of possible surprises from the Federal Reserve.

For the latest breaking crypto news, click here

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CME Data: Where Do Rate Expectations Stand?

The FedWatch Tool shows a divided market outlook ahead of the December 10 FOMC meeting:

• 350–375 bps: 52.1%

• 375–400 bps (current level): 47.9%

The narrow gap between the two outcomes highlights persistent uncertainty. While the market is leaning slightly toward a rate cut, confidence remains weak and highly sensitive to incoming data.

Mixed Signals From Federal Reserve Officials

Comments from Fed policymakers offer little clarity regarding the December decision. Their statements reflect both caution and concern, making it difficult for markets to form a definitive expectation.

Fed official Hammack outlined several risks and pressures shaping the outlook:

• The unemployment rate is near its maximum sustainable level.

• Inflationary pressures remain elevated.

• Monetary policy may need to stay “restrictive” for longer.

• Inflation is still high and appears to be firming rather than easing.

• Softening labor market conditions are complicating the Fed’s employment mandate.

These remarks imply that the Fed may not be in a rush to pivot toward easing.

Similarly, Neel Kashkari maintains a cautious stance, emphasizing that inflation remains around 3%. He noted that he has “no strong inclination” toward a December rate cut at this stage.

Data Gaps Add to Market Uncertainty

The 43-day U.S. government shutdown created additional complications for economic forecasting. The disruption prevented the release of complete labor-market data for October.
White House officials acknowledged that the true unemployment rate for the month may remain unknowable.

Senior Adviser Hassett explained that only part of the employment report could be produced, meaning the unemployment component would not be fully captured. Although the government reopened on October 13, the missing dataset adds another layer of ambiguity to the Fed’s assessment process.

A Fragile Outlook Ahead of the December Meeting

While market pricing has shifted back toward favoring a December rate cut, the direction remains far from certain. High inflation, uneven labor-market indicators and cautious commentary from Fed officials all challenge the likelihood of a decisive policy shift.

As a result, the December meeting is shaping up to be one of the most pivotal of the year — a moment when clearer data and a more unified stance from policymakers will be essential for establishing the next phase of monetary policy.

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FED Easing Expectations Add Momentum to Gold

According to Tim Waterer, Chief Market Analyst at KCM Trade, metal entered the week with solid buying interest. He noted that, despite the recent decline in the probability of a rate cut, investors still anticipate a policy easing move from the Federal Reserve next month. Waterer added that ongoing concerns in financial markets continue to support appetite for non-yielding assets such as gold.

Weakening Economic Signals Reinforce Policy Outlook

Economic data published last week revealed that the U.S. economy shed jobs in October. Declines in government and retail employment, combined with cost-cutting measures fueled by artificial intelligence adoption across businesses, contributed to an uptick in layoffs.

In addition, a survey released in early November showed that U.S. consumer confidence had dropped to its lowest level in nearly three and a half years. Analysts pointed out that concerns over what could become the longest government shutdown in history are weighing heavily on consumer spending. These developments have strengthened market expectations that the Fed may opt for a rate cut in its final meeting of the year.

Data from the CME FedWatch Tool indicates that investors now assign a 67% probability to a December rate reduction. A lower interest rate environment generally increases the appeal of non-interest-bearing assets such as gold, providing further price support.

Renewed Demand for Gold-Backed ETFs

Alongside physical buying, movements in gold-backed exchange-traded funds are also drawing attention. SPDR Gold Trust, the world’s largest gold ETF, reported that its holdings rose from 1,040.35 tons on Thursday to 1,042.06 metric tons on Friday—a 0.16% increase. This uptick underscores the continued investor shift toward gold amid rising macroeconomic uncertainties.

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Coinbase Institutional has released its new monthly market outlook report. The report includes an analysis of the major crash that occurred on October 10, 2025. The report highlights the massive leverage wipeout on that date, stating the following:

It is noted that following the major liquidation wave on October 10, a significant amount of leverage was cleared from the crypto market, suggesting that this may have formed a short-term bottom.

In fact, it would be fair to say that the market didn’t break down—it simply reset. Existing leverage levels have returned to healthier levels, particularly through the liquidation of long positions. As a result, an upward trend may emerge in the coming months.

You may also be interested in this article: Zcash Rises to 13th Place in MarketCap Rankings!

According to analysts’ forecasts, Bitcoin’s price could see a bottom around $90,000 in the next 3–6 months, followed by a potential path toward $160,000. The Coinbase report states that this setup appears asymmetrically skewed to the upside. It also points out that upcoming Fed rate cuts, liquidity expansion, and new regulatory frameworks could extend the current market cycle into 2026.

The report emphasizes that the October 10 crash did not trigger any structural issues within the market. Instead, it is described as a necessary cleansing event. Although altcoins experienced sharp declines and market makers pulled back, Coinbase analysts believe the core fundamentals remain intact, adding:

“The sell-off brought leverage levels back to where they were at the beginning of the year, creating a healthier system. Going forward, we expect a gradual upward climb rather than a sharp run to new all-time highs.”

The report also highlights that the liquidation in high-risk altcoins was the largest in recent months, and institutional investors were largely insulated from this wave due to their lower leverage and focus on high-cap assets.

What Does Nansen’s Perspective Say About the Coinbase Report?

According to Nansen data, the so-called “smart money” is currently shifting toward EVM-based networks such as Ethereum and Arbitrum, while losses are being observed on Solana and Binance Smart Chain following the meme coin frenzy. Coinbase does not view this as a buying opportunity; rather, it interprets these flows as indicators of where market activity is concentrating.

The report suggests that the next major bullish wave is likely to be led by institutions. According to Coinbase, institutional investors were largely unaffected by the previous liquidation phase due to their conservative leverage and focus on large-cap assets. With institutional appetite expected to return, the market could regain strength — though this recovery might take several months.

Current Bitcoin Data

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November: Historically Bitcoin’s Most Bullish Month

According to Markus Thielen from 10x Research, seasonal trends should be considered in combination with broader economic factors:
“Seasonal charts certainly matter, but they must be evaluated alongside macroeconomic developments,” Thielen noted.

Expectations for continued Federal Reserve rate cuts and progress in trade negotiations between the United States and China are contributing to a bullish outlook. Nevertheless, uncertainties surrounding the U.S. government shutdown and ongoing tariff policies continue to cast a shadow over economic stability.

U.S.–China Trade Tensions Begin to Ease

A recent meeting between U.S. President Donald Trump and Chinese President Xi Jinping was viewed as a step forward in reducing trade frictions. Trump described the talks in South Korea as “excellent.”

As part of the discussions, Trump agreed to scale back certain tariffs on China in exchange for Beijing taking stronger action against fentanyl trade, resuming soybean imports from the U.S., and suspending rare earth export restrictions for a year.

These developments come after the severe $19 billion liquidation wave on Oct. 11, which triggered a sharp market decline. Still, Georgetown University professor Dennis Wilder warned that the meeting merely represented “a pause” in the trade war rather than a lasting resolution.

Fed Rate Cuts and End of Quantitative Tightening

Earlier this week, Federal Reserve officials approved another quarter-point rate cut, lowering borrowing costs to their lowest level in three years. According to CME’s FedWatch data, traders currently assign a 63% probability to another rate cut at the December 10 meeting.

Although Fed Chair Jerome Powell stressed that another reduction is “not a foregone conclusion,” the central bank’s decision to end its quantitative tightening (QT) program on December 1 is seen as bullish for risk assets. Ending QT effectively halts liquidity withdrawal from the economy — a move that historically benefits markets like Bitcoin.

Government Shutdown Impacting Crypto Regulation

The U.S. government shutdown has now stretched into its fifth week, nearing record territory as political gridlock continues. President Trump has blamed the Senate’s filibuster rule for the stalemate and urged Republicans to remove it, calling it “the nuclear option.”

Analysts note that resolving the shutdown is crucial not only for the broader economy but also for the crypto sector. The reopening of the government is seen as a key step toward finalizing several Bitcoin ETF approvals and advancing the CLARITY Act — a major bill aimed at establishing clear regulatory frameworks for digital assets.

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According to Powell, data prior to the U.S. government shutdown suggested that economic growth was stronger than expected, with the economy returning to September levels. However, tariffs continue to increase price pressures, complicating the fight against inflation.

“The Fed must move carefully. Acting too quickly could leave the inflation battle unfinished,” Powell warned. He added that ending balance sheet expansion earlier would have made little difference, noting that balance sheet management remains a key tool of monetary policy.

Fed Nearing End of Balance Sheet Reduction

Powell indicated that the Federal Reserve could end its balance sheet reduction process in the coming months. This development comes amid signs of mild tightening in money markets. “We’re not far from our target, but there’s still some way to go,” he said, stressing that reserves remain abundant.

The Fed Chair also cautioned that a further decline in job openings could push unemployment higher. Research shows that the effects of monetary policy on employment and inflation take longer to materialize, making sudden policy shifts risky.

Powell warned that the slow pass-through of tariffs could pose a risk of persistent inflation, while declining to comment on gold or Bitcoin prices. “Inflation is driven by fundamental supply and demand factors,” he said, reaffirming the Fed’s data-dependent policy approach.

Powell’s remarks suggest that the Fed will remain data-driven and cautious in the months ahead. Markets are closely watching new signals regarding interest rates, balance sheet policy, and the inflation outlook.

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25 Basis Point Rate Cut Expected 

Market pricing shows near certainty that the Fed will cut its policy rate by 25 basis points this week. Traders also expect three more cuts by year-end and at least three additional reductions in 2026. The latest CPI data came in line with forecasts, rising 0.4% month-over-month and 2.9% annually. Core CPI stood at 3.1% year-over-year. 

Despite this, most economists believe a larger-scale cut is unlikely in the short term. Powell’s press conference following the decision will play a critical role in shaping expectations for the rest of the year. 

Trump–Powell Tensions 

President Trump criticized Powell as “inadequate” and called for an “immediate and significant cut.” He argued that while energy and food prices are easing, the housing market is being left behind due to high rates. Reports in U.S. media also claim Treasury Secretary Scott Bessent has been exploring potential successors to Powell. 

Trump’s remarks have heightened political pressure on the Fed, reigniting debates about its independence and raising new questions over the credibility of the U.S. dollar. 

The Lisa Cook Case and New Evidence 

The Trump administration has sought to remove Fed Governor Lisa Cook over alleged “deceptive and potentially criminal” mortgage disclosures. Cook countered that the removal order exceeded presidential authority and violated her due process rights. On September 9, a federal court granted an injunction preventing her removal. 

The administration has appealed the decision. However, newly published documents by NBC may weaken the government’s case. A May 2021 loan summary showed Cook’s Atlanta property listed as a vacation home—supporting her claim that it was declared as a second residence. The evidence could undermine allegations of misrepresentation in her mortgage filings. 

Candidates for Powell’s Successor 

Powell’s term expires in May 2026, and speculation about his successor is already heating up. Reported frontrunners include Kevin Hassett, Kevin Warsh, and Kevin Waller, while BlackRock executive Rick Rieder is also emerging as a strong candidate. 

These developments place Fed independence and market credibility under intense scrutiny. Ahead of the decision, both political pressures and legal battles remain in sharp focus for global investors. 

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Fed Independence in Question: A Catalyst for Gold

According to Goldman Sachs analysts, any erosion of the Federal Reserve’s independence could trigger a powerful new rally for gold. The bank emphasized that even a minor shift of capital out of U.S. Treasuries into bullion would be enough to send prices sharply higher.

Samantha Dart, one of the leading voices behind the report, noted:
“If just 1% of the U.S. Treasury market were to flow into gold, we estimate that the price could reach nearly $5,000 per ounce.”

Gold as a Value Anchor

The report highlighted one of gold’s enduring strengths: it does not rely on institutional trust. Analysts explained that if Fed credibility were undermined, it could result in higher inflation, weaker equities, declining long-term bond prices, and erosion of the dollar’s reserve currency status. In contrast, gold remains a reliable store of value outside institutional structures.

Political Pressures Stir Market Anxiety

Recent political dynamics have only intensified concerns. President Donald Trump’s attempts to exert greater control over the Fed—including efforts to remove board member Lisa Cook—have sparked debate about the central bank’s autonomy. While Cook has resisted such moves and pursued legal action, the episode is being closely monitored as no Fed governor has ever been removed in U.S. history.

Adding to the discussion, European Central Bank President Christine Lagarde warned that weakening the Fed’s institutional resilience could pose a “serious threat” to the global financial system.

Three Scenarios: $4,000, $4,500, and $5,000

Goldman Sachs outlined three potential paths for gold prices:

• Base Case: $4,000 per ounce by mid-2026

• Upside Case: $4,500 per ounce

• Tail-Risk Scenario: Close to $5,000 per ounce (if 1% of U.S. Treasuries shift to gold)

The bank reiterated that gold remains its highest-conviction long recommendation in the commodities sector.

Central Bank Buying and Rate Cut Bets Fueling Momentum

Much of gold’s strength this year has been driven by robust central bank purchases and market expectations that the Fed will soon move toward interest rate cuts. These factors, combined with political uncertainty and rising demand for safe-haven assets, have reinforced gold’s status as one of the best-performing commodities in 2025.

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