According to analysts at Coinbase Institutional, December could be a favorable month for cryptocurrency growth.
Experts cited improved liquidity conditions, a sharp rise in expectations for a rate cut by the US Federal Reserve, and a number of macroeconomic trends that have begun to shift toward riskier assets as reasons for the recovery.
Coinbase’s user-defined global money supply index, M2, is now steadily rising again after a mid-year decline. Its growth is one of the most accurate indicators of global liquidity, and previous periods of its growth have coincided with periods of growth in Bitcoin and the cryptocurrency markets in general.
As liquidity increases, digital assets typically become more attractive to both institutional investors and retail traders.
Additionally, as of early December, the likelihood of a US Federal Reserve rate cut had risen to 92%, which has historically driven capital inflows into cryptocurrency.
According to Coinbase analysts, the pullback seen in November looks more like a controlled reset than a structural weakness.
At the time of writing the article Bitcoin traded at $89,700, down 1,32% over the past week. Efirium over the same period, it rose 1,75% to $3,052.