Bitcoin started December with a sharp decline, dropping below the $86,000 mark, reflecting heightened risks in global financial markets. This coincided with rising expectations regarding a potential change in the monetary policy of the Bank of Japan, which intensified pressure on risk assets and negatively impacted investor sentiment.
This is reported by Finway
Global Markets and Cryptocurrencies Under Pressure
At the beginning of December, S&P 500 futures fell by 0.6%, and Bitcoin dropped below $86,000, leading to further declines in the prices of major crypto tokens and stocks of leading companies in the sector. In particular, shares of Meta Platforms and Nvidia lost over 1.3% in pre-market trading. The decline in the crypto market was accompanied by an overall decrease in risk appetite among investors.
Impact of the Bank of Japan and Fed Decision Expectations
Increased nervousness in the markets is linked to a statement from the head of the Bank of Japan, who hinted at the possibility of raising the base rate. This caused the yield on two-year Japanese bonds to rise to its highest levels since 2008 and led to a sell-off of government debt securities worldwide. A tightening of monetary policy in Japan could affect global liquidity and operations based on interest rate differentials, which analysts believe represents a structural change for financial markets.
Uncertainty regarding upcoming economic data from the U.S., including manufacturing statistics, the PCE inflation rate, and statements from Federal Reserve officials, also remains one of the key factors influencing investor sentiment ahead of the last Fed meeting of 2025. Additionally, the market is closely monitoring the process of appointing Jerome Powell’s successor, which heightens sensitivity to macroeconomic news.
“According to analysts, the sell-off of Bitcoin reflects a general deterioration in sentiment. The ‘fear and greed’ indicator has dropped more sharply than the asset itself, which usually indicates aggressive position reductions and sustained selling pressure.”
Experts point out that December 2025 could prove to be extremely volatile for crypto assets and traditional markets. Expectations for a Fed rate cut have already been partially priced in, so the room for further easing of monetary policy is limited.