TLDR:
Powell speaks December 1 as Fed ends three-year quantitative tightening program simultaneously
Markets price 87 percent chance of December rate cut ahead of upcoming FOMC meeting decision
Altcoins outperformed Bitcoin for months after 2019 QT ended with similar market structure today
Labour market weakness versus inflation focus will determine if crypto rally continues or retraces
Federal Reserve Chair Jerome Powell will deliver a major economic address on December 1. The speech arrives just days before the Federal Open Market Committee meeting. Markets have already priced in an 87 percent probability of a December rate cut.
Powell’s remarks will likely set the tone for cryptocurrency markets heading into 2025.
Fed Policy Shift Coincides With End of Quantitative Tightening
The Federal Reserve is officially ending its quantitative tightening program on December 1. The central bank has run QT for over three years.
Historical patterns suggest significant implications for digital assets. The last time QT ended in 2019, alternative cryptocurrencies outperformed Bitcoin for several months.
That strength persisted even through the 2020 market crash. When quantitative easing resumed, altcoins entered an extended uptrend. The current market structure mirrors that earlier period. Traders are watching for any indication about 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 concludes. Global monetary conditions are also shifting. Japan, China, and Canada have already begun easing or are preparing policy adjustments.
Any signal from Powell that aligns with global easing could boost liquidity expectations. Cryptocurrency markets typically react faster than traditional assets to such shifts.
The previous Powell speech took a hawkish stance and immediately weakened Bitcoin momentum. This time, market participants are looking for different signals.
Labour Market Data May Drive Rate Cut Expectations Higher
Powell’s focus during the speech will be critical for near-term price action.
If he emphasizes weakening labour market conditions over inflation concerns, rate cut probability becomes nearly certain. That shift alone could support the current relief rally in Bitcoin and altcoins.
The market faces two clear scenarios.
A signal indicating room for additional rate cuts would likely strengthen crypto prices. Conversely, if Powell suggests the Fed cannot cut much further, the recent rally could retrace.
The entire setup depends on how the central bank frames its next policy phase.
Inflation stability through tariffs and other policy tools remains a key variable. Unemployment continues moving toward concerning 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 December 1 remarks 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 prepared for immediate volatility following his comments.
