Coinbase Institutional released its monthly outlook report on Wednesday, suggesting that following Bitcoin’s weakness in November, conditions could be favorable for a market reversal in December.
summary
- Bitcoin underperformed in November, falling more than three standard deviations below its 90-day average, while U.S. stocks fell more modestly.
- With the end of quantitative tightening and a potential Fed rate cut, market conditions could favor a reversal in December, as held-up cash could be used as assets in Bitcoin and cryptocurrencies.
- “I’m bearish on the Fed and what it continues to do to the value of the dollar,” says James Rabish. “Bitcoin captures this.”
The institutional arm of a crypto exchange said the outflow of funds from the market may be coming to an end, citing the Federal Reserve’s return to the bond market following the end of quantitative tightening. The company characterized this development as generally favorable for risk-on assets, including cryptocurrencies.
According to the report, Bitcoin underperformed U.S. stocks on a risk-adjusted basis in November, falling more than three standard deviations below its 90-day average. The S&P 500 fell by just one standard deviation over the same period, the report said.
The analysis identified several challenges affecting the cryptocurrency market. Spot exchange-traded fund flows turned negative in November, with cumulative outflows for the month hitting a record high. According to the survey results, stablecoin supply contracted at the weakest 30-day rate since 2023.
The report notes that long-term Bitcoin holders distributed their coins rather than accumulating them during the period. The digital asset treasury vehicle traded below its net asset value for the first time in 2024.
You may also like: Strategy CEO: Selling Bitcoin is Plan Z. “We accumulate it…price agnostic.”
K-shaped economic recovery
The report also cited concerns about a “K-shaped” economic recovery, where corporate profits could increase while personal income stability decreases due to job losses due to artificial intelligence. However, the evidence that this trend will impact the crypto market remains weak, the document states.
Coinbase Institutional indicated that surplus cash, including large money market balances, could be moved into regulated Bitcoin vehicles once market conditions stabilize. The company reiterated its October assessment, saying it would likely take several months for the market to fully stabilize.
The report suggested that conditions could support a reversal in December if the US Federal Reserve cuts interest rates and releases capital inflows.
Why are you so bullish, Ravish?
Former hedge fund manager James Rabish commented on X that the Federal Reserve has added a total of $8.8 trillion in liquidity to the market over the past 16 years, and removed a total of just $3.2 trillion “by the time you call me ‘Uncle’ a second time.”
He added: “So if people ask why I’m so bullish on Bitcoin, it’s simple. I’m bearish on the Fed and what it continues to do to the value of the dollar. Bitcoin captures this.”
Over the past 16 years, the Fed has added a total of $8.8 trillion of liquidity to the market and removed a total of just $3.2 trillion before calling it “Uncle” for the second time. So when people ask why I’m so bullish on Bitcoin, it’s simple. I’m bearish on the Fed and its content… pic.twitter.com/Z9cY2J6JDE
— James Lavish (@jameslavish) December 2, 2025
The Fed has recently injected liquidity into the banking system through overnight spot forward contracts, the second-largest surge since the coronavirus pandemic, according to data from the St. Louis Fed.
read more: Coinbase stock price soars as Bitcoin price soars, Cathie Wood continues to buy