Fed futures show 98.5% chance of December 2025 cuts, strongest bias since 2024.
Traders recall Bitcoin’s rally after last year’s rate cuts, expect repeat setup.
Goldman Sachs forecasts five cuts through 2026, putting terminal rates near 3.25%.
Bitcoin traders are gearing up as Fed futures point to a 98.5% chance of rate cuts by December 2025. Markets are setting the stage for a shift that could echo last year’s explosive rally.
Federal funds futures are sending a clear signal. CME data shows a 44.7% probability of rates falling to 375–400 basis points (bps) at the December 10, 2025 meeting. A deeper cut to 350–375 bps carries a 38.8% chance. Together, that leaves a 98.5% probability of easing.
The chances of holding steady at 425–450 bps stand at just 1.5%. No expectations exist for hikes. The ZQZ5 contract, expiring at the end of 2025, trades at 96.1475 with over 96,000 open positions, highlighting firm conviction. The bar chart of outcomes shows the 375–400 bps range as the most likely, with the 350–375 bps band close behind.
Crypto traders are drawing comparisons with last year. In Q3 2024, before the Fed’s September cut, many expected easing to hurt markets. Instead, Bitcoin and altcoins rallied sharply once cuts began.
Analyst BitBull on X noted that selling ahead of the September move proved a costly mistake. With markets now again leaning toward aggressive easing, traders are positioning for a similar breakout in 2025.
https://twitter.com/AkaBull_/status/1957311038912651582
Weak jobs data and slowing inflation have increased calls for cuts. Treasury Secretary Scott Bessent suggested policy should be lowered by as much as 150–175 bps, pointing to restrictive rates and soft employment numbers from May through July.
Inflation is also cooling. July’s Consumer Price Index rose just 0.2%, helped by a 2.2% drop in gasoline prices, while food prices held steady. Goldman Sachs projects three 25 bps cuts this year and two more in 2026, bringing the terminal rate near 3–3.25%. Barclays, however, warned that markets may be overconfident, stressing the Fed’s focus on labor market risks.
The market picture is almost unanimous: easing is coming. If the 2024 playbook repeats, Bitcoin and altcoins could see another rally as monetary policy turns accommodative into 2025.
