What happens to the crypto market after the December rate cut?

The Federal Reserve cut interest rates by 25 basis points as expected, but what truly impacts crypto is not the rate cut itself, but the market’s six major expectations for the future:

1. Is this the beginning of a rate-cutting cycle or a one-time action?
Starting a cycle → stronger trend; symbolic rate cut → likely fluctuation.

2. How much room is there for rate cuts in 2026?
As interest rate futures start pricing in more rate cuts, risk assets will become more favored.

3. The direction of real interest rates (10Y TIPS)
BTC trend is highly negatively correlated with real interest rates. Falling real interest rates → mid-term strength in crypto.

4. Fiscal liquidity: Will TGA decline?
TGA decrease = government puts money back into the market, which can drive trends more than the 25bp cut.

5. Will ETF fund flows continue?
Rate cuts are just the background; sustained net inflows into ETFs are the core driver of the market.

6. Are there new narratives capable of attracting funds?
Whether capital can healthy diffuse from BTC → ETH → AI/L2/RWA sectors determines the height of altcoin rallies and the bull market.

Summary in one sentence:
Rate cuts are not the end but the beginning of a new set of expectations. The interest rate path, liquidity, institutional funds, and sector rotations over the next 12 months are key to determining crypto’s direction.