Institutional desks reduce exposure as Federal Reserve minutes threaten year-end volatility for Bitcoin and Ethereum.
WASHINGTON | December 30, 2025 — Global digital asset markets have entered a period of consolidation as market participants await the release of the Federal Reserve’s December policy meeting minutes. The document, providing granular detail on the central bank’s trajectory for 2026, remains a primary hurdle for Bitcoin’s attempt to reclaim the $90,000 psychological level.
Trading desks in New York and London reported a significant drop in spot volumes over the last eight hours. Market participants noted that the absence of aggressive bidding is a direct response to uncertainty regarding the “terminal rate” for the coming year. While the previous policy statement suggested a pause, the minutes are expected to reveal the internal debate regarding persistent inflation metrics and the pace of future easing.
The scheduled release of the FOMC December minutes has triggered a preemptive de-risking phase across the crypto complex. Bitcoin’s rejection at the $90,000 resistance earlier today was exacerbated by traders hedging against a potentially hawkish tone in the Fed’s internal discussion, leading to a $2.4 billion reduction in total market capitalization within a three-hour window.
Data reviewed by this publication shows Bitcoin oscillating between $87,200 and $88,500. This narrow range reflects the defensive posture prevalent across global financial hubs. In Singapore, traders noted that the Asian session was characterized by cautious positioning, with a measurable increase in the purchase of protective put options for January expiries.
Liquidity providers have reportedly widened spreads in anticipation of the afternoon release. According to sources familiar with the matter, several high-frequency trading firms reduced participation until the document is fully digested by the bond markets. This reduction in order-book depth leaves the market susceptible to outsized price swings on relatively low volume.
Ethereum has mirrored Bitcoin’s caution, struggling to maintain its footing above the $3,000 mark. Despite positive on-chain data regarding validator entry queues—which suggest long-term conviction—the macro narrative remains the dominant driver. Industry sources noted that the correlation between Ethereum and the Nasdaq 100 has tightened in the final days of the year as both assets react to shifts in the US Treasury yield curve.
Data reviewed by this publication shows that BTC perpetual swap funding rates have shifted to neutral, down from 0.015% in the previous session. Aggregate open interest across major exchanges has declined by 4.2%, suggesting that leveraged long positions were shuttered ahead of the volatility expected from the FOMC release.
The internal sentiment at major OTC desks suggests that a “hawkish” surprise—indicating fewer rate cuts in 2026 than currently priced in—could catalyze a liquidation event. Such a move would likely test the $82,000 support level. Conversely, market participants said any indication of a consensus toward easing would likely validate the “soft landing” narrative, potentially triggering a liquidity injection into risk-on assets.
In Europe, funds have reportedly adjusted exposure by moving into liquid stablecoin positions. Market participants pointed to a surge in USDC inflows as a signal that managers are preparing for a potential re-entry post-release. This move toward “cash-like” digital assets reflects a broader institutional hesitation to hold directional bets during major policy disclosures.
Derivative markets show a distinct skew. Analysts in London observed that the implied volatility for Bitcoin options has spiked, even as the spot price remains range-bound. This “volatility smile” indicates that while the market is unsure of the direction, it anticipates the FOMC minutes will terminate the current period of stagnation.
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Beyond price action, the minutes are expected to clarify the Fed’s stance on balance sheet reduction. For the crypto market, which remains sensitive to dollar liquidity, any mention of accelerating the runoff of assets would be viewed as a net negative. Analysts in New York noted that Bitcoin’s role as a liquidity barometer is being tested as global M2 money supply shows signs of plateauing.
Market participants pointed to adjustments by macro hedge funds reacting to the day’s developments. Flow data indicates a rotation out of mid-cap altcoins and into Bitcoin and cash equivalents, a classic defensive maneuver observed prior to high-impact Federal Reserve communications.
As the countdown to the release continues, the broader altcoin market is underperforming. Assets like Solana and Cardano have seen 2% to 4% pullbacks as speculative capital exits. This “flight to quality” within the crypto ecosystem is typical of periods where the macro-economic outlook is clouded by impending central bank data.
Regional dynamics are also at play. While the US focuses on the Fed, regulatory developments in the EU regarding stablecoin reserves have added a secondary layer of complexity to the day’s trading. However, the gravity of the FOMC minutes has largely sidelined these regional concerns, as the global cost of capital remains the primary factor for digital asset valuations.
The document is expected to be released at 14:00 EST. Until then, the crypto market is likely to remain in its current holding pattern. Market participants emphasize that the true reaction will not be seen in the immediate headline, but in the subsequent movements of the 10-year Treasury yield and the US Dollar Index (DXY).
The integration of crypto into traditional finance means these minutes are now scrutinized by a wider array of institutional investors than in previous cycles. This institutionalization has brought maturity to the market but has also made it more sensitive to the same pressures affecting equities and bonds. As the year draws to a close, the FOMC minutes represent the final major hurdle for the asset class in 2025.
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