The Federal Open Market Committee (FOMC) meeting will be held later this week on Dec. 10, 2025. The meeting will decide whether the Federal Reserve rolls out another interest rate cut in December, or not. According to CME FedWatch, there is an 87.2% chance that the Federal Reserve will reduce interest rates by another 25 basis points. Despite the high chances of another interest rate cut, the crypto market is showing no signs of a rally; instead, prices seem to be consolidating. Let’s discuss why the crypto market is not showing any positive movements.
Why Is The Crypto Market Stagnant, Despite High Interest Rate Cut Chances?
The lack of any movement in the cryptocurrency market could be due to macroeconomic uncertainties. Investor sentiment has not fully recovered after the market crash in October-November. According to Alternative, investor sentiment is still in the “extreme fear” region.
Cryptocurrency ETF inflows have also slowed down significantly over the last few months. Low ETF inflows could signal a bearish outlook from financial institutions. Investors could be looking at low ETF inflows as a sign that the worst is not yet over.
Despite the lackluster performance over the last few weeks, the cryptocurrency market may build up steam over the coming days. If the Federal Reserve cuts rates by another 25 basis points, Bitcoin (BTC) could see a massive surge in inflows. Other assets will likely follow suit.
Additionally, Grayscale believes Bitcoin (BTC) will climb to a new all-time high sometime next year, based on its thesis that the original cryptocurrency follows a 5-year cycle, and not a 4-year cycle. BTC hitting a new peak next year could trigger a market-wide bull run.
However, there is also a possibility that the cryptocurrency market will not react to a potential interest rate cut. October saw a 25 basis point rate reduction, but the crypto market did not budge.