Asian markets opened with risk assets firmer while Bitcoin remains near 87,000 USD, driven by growing expectations of an interest-rate cut by the Federal Reserve. The CME FedWatch Tool places the probability at 96.7% of a 25 basis point reduction at the meeting scheduled for December 2025, a context that has directed flows toward higher-risk assets.
Fed narrative and reaction of risk assets
Conviction of a Fed cut acts as a catalyst for a coordinated move toward risk exposure. Regional equity prices and crypto assets have shown a positive open, with the CME FedWatch Tool serving as a gauge of sentiment; the 96.7% reading for a 25 basis point cut has reduced the implied financing cost and shifted preference toward assets with greater appreciation potential.
Bitcoin trades stable around 87,000 USD with elevated market activity, reflecting intense trader participation. Its 24-hour trading volume moves in the range of tens of billions of dollars, and despite the bullish bias from the prospect of lower rates, the cryptocurrency does not experience a proportionally larger rally, attributed to profit-taking by short-term holders and residual market caution after uncertain monetary policy cycles.
A 25 basis point adjustment is perceived as significant due to liquidity dynamics and opportunity cost. Technically, a “basis point” equals 0.01% and is used to measure small changes in interest rates; the “opportunity cost” is defined as the return foregone by choosing one investment over another, and in low-yield fixed income markets, the opportunity cost favors non-yielding assets but with appreciation potential such as Bitcoin.
Historical references in 2025 link prior 25 basis point cuts to notable Bitcoin gains, with scenarios pointing to potential higher targets. Previous cuts in September and October 2025 correlated with significant increases in Bitcoin, which surpassed 84,000 USD and even reached an intraday high cited in the market analysis, while some analysts mention that a surprise cut could push the price toward 112,000 USD or even 140,000 USD, depending on the magnitude and timing of future monetary policy.
Implications for managers and treasuries
Crypto treasuries and institutional investors face heightened market sensitivity to US monetary policy. The expectation of cheaper liquidity changes risk distribution and allocation incentives, making policy signals a primary driver of positioning.
Exposure decisions should be calibrated against implied volatility and the risk of rapid reversals. A moderation in macro readings that lowers the probabilities of a cut could quickly shift flows, warranting careful sizing and timing of allocations.
The opening momentum in Asia reflects a dominant narrative centered on a potential Fed cut in December 2025 that favors risk assets and keeps Bitcoin around 87,000 USD. The next verified milestone is the Federal Reserve meeting in December, whose communication will specify the magnitude of the adjustment and, therefore, the direction of global allocation incentives.
