Asia Market Update: Bitcoin Stabilizes Around $90K; Regional Stocks Struggle Amid Fed Rate Cut Expectations

Summary:
Bitcoin remained steady near the $90k level during the Asian trading session on Friday, while regional stock markets faced uncertainty as investors assessed a robust global recovery against indications that the market rally might be losing momentum. This article delves into the current state of cryptocurrencies and stocks amidst evolving Federal Reserve policies.

Key Takeaways

Bitcoin is trading around $90,868, showing a minor decline of 0.2%.
Key regional stock markets opened mixed, influenced by expectations of upcoming Federal Reserve rate cuts.
JPMorgan has upgraded its outlook on the Chinese market, suggesting potential for growth despite ongoing property market challenges.
US spot Bitcoin ETFs are experiencing slower inflow rates but remain positive, with BlackRock continuing to lead in asset management.

Bitcoin

Bitcoin’s Steady Performance

During Friday's Asian trading session, Bitcoin fluctuated between roughly $90,600 and $91,400, after briefly reaching nearly $91,800 within the last 24 hours. The largest cryptocurrency is trading at approximately $90,868, down by 0.2%.

Meanwhile, a global equity index has remained relatively stable, although traders are optimistic about the likelihood of the Federal Reserve initiating interest rate cuts soon, leading to this week being on course for its best performance since June.

Market Overview

Bitcoin: $90,868, down 0.2%
Ether: $3,001, down 1.6%
XRP: $2.17, down 2.2%
Total cryptocurrency market capitalization: $3.18 trillion, down 0.9%

Focus on China as JPMorgan Upgrades Market Outlook

Asian stock markets opened with varied performances. South Korean and Japanese indexes started lower, while Australian stocks inched upwards due to reduced trading volume following the US Thanksgiving holiday.

Chinese markets attracted attention as JPMorgan raised its assessment to an overweight stance, reasoning that the potential upside for next year outweighs the risks of further declines, despite ongoing pressures within property sectors such as China Vanke.

The sentiment across assets has largely been shaped by expectations surrounding the Federal Reserve. Futures markets indicate an 80% to 85% likelihood of a 25 basis-point rate reduction next month, with forecasts suggesting three cuts might occur by the end of 2026.

This shift has enabled global stocks to recover significantly from earlier November losses driven by concerns regarding inflated valuations in AI-related stocks.

Labor Market Data and Fed Signals Support December Rate Cut

Yields in the bond market have been declining since late last week, following a mixed report on delayed September job figures. The downward trend accelerated after New York Fed President John Williams indicated a possible rate cut in the near future due to a softened labor market.

Trading activity has been lighter than usual, impacted by the shortened Thanksgiving holiday week and an earlier US government shutdown that delayed crucial economic data. Consequently, investors have increasingly relied on commentary from Federal Reserve officials for direction.

Recent statements from Fed officials, including those from San Francisco Fed President Mary Daly and Governor Christopher Waller, have solidified expectations of a potential rate decision in December.

ETF Inflows Slow but Remain Positive, BlackRock Still Leads

In the cryptocurrency market, American spot Bitcoin ETFs have continued to attract capital, though at a slower rate compared to earlier this year. Data from SoSoValue indicates daily net inflows of approximately $21 million on November 26, making the cumulative figure around $57.6 billion. The total trading volume for that day reached about $4.6 billion, bringing total ETF assets to around $117.7 billion, which constitutes approximately 6.6% of Bitcoin's market valuation.

Flows were largely concentrated on BlackRock’s iShares Bitcoin Trust (IBIT), which recorded about $42.8 million in net inflows for the day and now manages assets worth approximately $69.9 billion. In contrast, Fidelity’s FBTC saw an outflow of around $33.3 million, while Grayscale’s restructured GBTC registered a modest inflow of $5.6 million but still reflects significant cumulative outflows of about $25 billion since the launch of spot ETFs.

Smaller ETF products from Bitwise, Ark 21Shares, VanEck, and others experienced flat growth, with only a few million dollars in new investments.

This data highlights a substantial shift toward regulated investment vehicles. IBIT alone now captures about 3.9% of Bitcoin's overall market, while the wider ETF suite contributes a considerable portion of the circulating supply.

For traders across Asia observing a slightly fluctuating crypto market and wavering local stocks, the combination of substantial ETF holdings and increasing odds of Federal Reserve rate cuts is likely to influence market sentiment as the year draws to a close, despite more cautious trends seen in Bitcoin and stock prices following a week of substantial growth.