Bitcoin is showing signs of renewed bullish momentum, buoyed by increasing expectations of an imminent interest rate cut by the Federal Reserve. The cryptocurrency has settled above $91,000, recovering from a dip to nearly $80,000 last week. This rebound coincides with a surge in bets on a rate cut at the Fed's December meeting, with the CME FedWatch tool indicating an 87% probability of a 25-basis-point cut, a significant jump from 39% just a week prior.
Lower interest rates generally make riskier assets like Bitcoin more attractive by easing liquidity constraints and encouraging investment flows. Adding to the positive sentiment is speculation that Kevin Hassett, a White House economic advisor, could be nominated as the next Fed Chair. Many market participants view him as more dovish than current policymakers, potentially leading to a more aggressive path of rate reductions.
On November 25, 2025, Bitcoin rallied to $93,000, fueled by growing anticipation of the Federal Reserve lowering interest rates in December. Market sentiment now places the likelihood of a 25-basis-point cut at 85%. This upward movement saw Bitcoin rise 1.67% from $87,000, reclaiming that key level. The broader cryptocurrency market also experienced a wave of optimism.
Institutional interest in Bitcoin is also accelerating. The state of Texas invested $5 million in BlackRock's Bitcoin ETF and is preparing an additional $5 million self-custodied purchase. Harvard University's endowment revealed a $443 million position in BlackRock's IBIT, while Abu Dhabi's Al Warda Investments nearly tripled its ETF holdings to $517.6 million.
However, investors remain cautious. Sticky inflation and mixed U.S. economic data have prompted some to question how quickly or forcefully the Fed may move, raising concerns over whether Bitcoin's rebound marks the start of a sustainable uptrend or merely a temporary bounce.
Looking ahead, the market's attention remains fixed on the Federal Reserve's upcoming decision. A rate cut could further cement Bitcoin's status as a high-beta risk asset, though a more cautious approach by the Fed might limit potential gains. Analysts note that Bitcoin's price swings are closely linked to evolving expectations around interest rates, and the cryptocurrency may increasingly mirror movements in equity markets rather than gold.
Despite a nearly 20% decline over the past month, Bitcoin's price has shown recovery, with a 4.35% increase in the last 24 hours. This recovery is attributed to traders anticipating another Fed rate cut in December, driven by a shift in sentiment from policymakers. JP Morgan has predicted a possible 25-basis-point cut in December, revising their previous stance of holding rates steady until January. They referred to comments from New York Fed President and FOMC Vice Chair John Williams.
