12.11 AI Daily Cryptocurrency Market Faces "Bad Start", Global Monetary Policy Divergence Worsens

1. Headline

1. Federal Reserve Chair Powell Sends Signal of Likely December Interest Rate Cut

Federal Reserve Chair Jerome Powell delivered a speech at a commemorative event, signaling that a rate cut in December is highly probable. Powell indicated that while inflation pressures have eased somewhat, they remain elevated, and the Fed will continue raising interest rates until inflation significantly declines. However, he also emphasized that policy decisions require patience and caution, and should not be too aggressive.

Market participants generally believe Powell’s speech implies the Federal Reserve will initiate a rate-cut cycle in December. Analysts point out that weak U.S. employment figures, sluggish consumer spending, and lack of policy transparency have all created conditions for the Fed to shift towards easing. A 25 basis point rate cut is expected in December, with multiple cuts possibly following in 2026.

Expectations of rate cuts have revived risk assets. Major cryptocurrencies like Bitcoin and Ethereum surged in the short term, and tech stocks also rebounded notably. However, some analysts believe that inflation remains severe, making it difficult for the Fed to be too aggressive, and that large-scale rate cuts in the short term are unlikely. Investors should remain cautious and not overly optimistic.

2. Bank of Japan Signals Hawkish Stance, Global Monetary Policy Diverges

Bank of Japan Governor Ueda Kazuo delivered a hawkish message in his latest speech, stating that if economic activity and inflation expectations unfold as planned, the BOJ will continue raising its policy interest rates. This statement caused sharp declines in Asia-Pacific stock markets, with the Nikkei 225 briefly falling below 50,000 points.

Analysts note that Japan’s hawkish stance contrasts sharply with the dovish tendencies of major central banks like the Fed, intensifying global monetary policy divergence. This not only heightens uncertainty about the global economic outlook but could also trigger a new round of currency wars.

In fact, the recent yen-dollar exchange rate has experienced significant volatility. If the BOJ indeed tightens monetary policy further, the yen may strengthen further, damaging Japan’s export competitiveness and severely impacting economic recovery. Meanwhile, a stronger yen could prompt other countries to devalue their currencies to protect exports, further fueling global currency conflicts.

3. Cryptocurrency Faces “Bad Start”: Bitcoin Briefly Falls Below $17,000

On December 1, the cryptocurrency market experienced a rough start. Major tokens like Bitcoin and Ethereum plunged over 5% within just three hours, with Bitcoin briefly dropping below $17,000.

On the news front, hawkish comments from BOJ Governor Ueda Kazuo triggered a sharp decline in Asia-Pacific stocks, which also affected the crypto market. Meanwhile, Trump announced that a new Federal Reserve Chair has been finalized, with speculation that the appointee may be hawkish, fueling market panic.

Analysts say that the sharp decline in cryptocurrencies reflects investor concerns about the global economic outlook. If major central banks shift to a hawkish stance, inflation pressures could intensify, putting risk assets under heavy pressure. Rising geopolitical risks also increased demand for safe-haven assets.

However, some analysts believe that this recent plunge is mainly a technical correction, and major cryptocurrencies like Bitcoin still have room to rebound in the medium to long term. After all, as a new asset class, cryptocurrencies’ long-term value remains intact.

4. Sony Bank Plans to Issue USD Stablecoin, Cryptocurrency Payments May Become Widespread

According to Nikkei, Sony Bank is expected to issue a dollar-pegged stablecoin in the U.S. as early as fiscal year 2026, planning to use it for payments within its gaming and anime ecosystem.

Analysts see this move as a sign that traditional financial institutions are accelerating their adoption of cryptocurrencies. Stablecoins, digital tokens linked to fiat currencies, combine the efficiency and convenience of cryptocurrencies with reduced volatility, making them an important entry point for crypto payments.

Once launched, Sony Bank’s stablecoin could offer new payment options for its gaming and anime content ecosystem, potentially enhancing user experience. It may also serve as a key infrastructure component for Sony’s metaverse and other emerging fields.

However, some believe regulatory issues surrounding stablecoins remain a major challenge. Divergent policies across countries could complicate their development, and balancing innovation with risk management will require further exploration.

5. Japan Plans to Levy a 20% Flat Tax on Cryptocurrency Transactions

Nikkei reports that Japan’s government is adjusting its taxation policy on cryptocurrency gains, aiming to impose a uniform 20% income tax regardless of transaction size, aligning it with taxes on stocks and investment trusts.

Analysts say this move seeks to reduce tax burdens for investors and stimulate the domestic crypto trading market. Currently, Japan taxes crypto earnings through a comprehensive tax system, with top rates reaching 55%, which is burdensome for investors.

The Financial Services Agency (FSA) also plans to submit amendments to the Financial Instruments and Exchange Act during the 2026 regular session, aiming to strengthen regulation of crypto trading. The amendments will explicitly prohibit insider trading and require crypto issuers to disclose information.

Experts believe these measures reflect Japan’s active integration into the global crypto regulatory framework. As a major crypto trading market, Japan’s regulatory adjustments could have far-reaching impacts on the global crypto ecosystem.

2. Industry News

1. Bitcoin briefly dips below $88,000, market sentiment turns to panic

On December 1, during Asian trading hours, Bitcoin experienced a sharp decline, briefly falling below $88,000, with a low of $86,317. Prior to that, Bitcoin faced heavy selling pressure near $91,000, quickly falling through multiple support levels at 5, 10, and 30-hour moving averages, shifting the short-term trend from consolidation to downward.

Analysts attribute this decline mainly to hawkish remarks from the BOJ governor and news about Trump’s nominee for Fed Chair. Ueda Kazuo indicated that if economic activity and inflation expectations unfold as planned, the BOJ would continue raising rates, fueling market expectations of rate hikes in Japan. Meanwhile, Trump’s hints about the new Fed Chair candidate increased uncertainty over interest rate policies.

Worries about rate hikes led to risk asset sell-offs, and the crypto market was no exception. Bitcoin briefly fell below the $88,000 support, triggering panic across the market. According to derivatives platform data, $426 million in long positions were liquidated during Bitcoin’s rapid decline.

Analysts state that whether Bitcoin can find effective support around $86,000–$89,000 will determine its future trajectory. Failure to regain this level could see Bitcoin falling further to the key support zone of $80,000–$82,000. Conversely, some believe this correction is merely profit-taking, and Bitcoin still has long-term upside potential.

2. Ethereum Hacked, Yearn Loses Over $9 Million

On December 1, Ethereum DeFi protocol Yearn was hacked, losing approximately $9 million. Attackers exploited a vulnerability to mint unlimited yETH tokens and drained around $9 million from liquidity pools.

According to blockchain security firm PeckShield, around 15 major attacks occurred in the crypto space in November, with total losses reaching $194 million, a 969% increase month-over-month. Yearn ranks third, after losses of $137 million and $36 million in other incidents.

The Yearn breach has reignited widespread concern over DeFi security. Analysts note that despite rapid growth, DeFi’s code complexity and emerging technology uncertainties make security vulnerabilities and hacking persistent problems.

Experts advise DeFi projects to strengthen code audits and promptly fix vulnerabilities; investors should also enhance risk awareness and exercise caution. Meanwhile, regulators need to increase oversight of DeFi to protect investors and promote industry healthy development.

3. Cryptocurrency Trading Volume Plummets, Hits Six-Month Low in November

Data from The Block shows that in November, spot trading volume on crypto exchanges fell to $159 billion, down 26.7% from the previous month, marking a six-month low. Leading exchanges’ volumes dropped from $810.44 billion in October to $599.34 billion.

Decentralized exchanges (DEXs) also saw a sharp decline, with November trading volume at $397.78 billion, down 30%, the lowest in half a year. Analysts attribute the decline mainly to profit-taking after recent market rallies and reduced volatility.

Correspondingly, Bitcoin spot ETF saw a net outflow of $3.48 billion in November—its largest monthly outflow since February—indicating waning institutional demand.

The sharp volume drop has raised concerns about decreasing crypto market enthusiasm. However, some analysts view this as a short-term correction, and with regulatory clarity and expanding use cases, the crypto market still holds substantial growth potential.

Overall, November saw a pattern of “high-level consolidation and low trading activity” in the crypto market. Investor sentiment cooled, but the long-term bullish trend remains intact. Future developments will depend on macroeconomic factors, regulation, and adoption.

3. Project Highlights

( 1. Telegram Founder Announces Decentralized AI Computing Network Cocoon

Telegram founder Pavel Durov announced the launch of Cocoon, a decentralized AI computing network. Built on the TON blockchain and Telegram ecosystem, Cocoon aims to address privacy and cost issues faced by traditional AI computing providers. It allows users to perform confidential computations using GPU providers’ computing power and settle payments with TON tokens.

The launch marks a significant step for Telegram’s entry into AI. Cocoon will offer secure, efficient, and cost-effective AI computing services, potentially democratizing and popularizing AI technology. Leveraging blockchain’s decentralization, Cocoon provides transparent and trustworthy computing environments, avoiding privacy and security risks of traditional cloud services.

Cocoon has attracted widespread industry attention. Analysts believe it could be a disruptive innovation in AI computing, bringing a new user experience. It also injects new vitality into the TON ecosystem, supporting its growth. However, Cocoon is still in early stages, and its future depends on ongoing development.

) 2. Sui Ecosystem Achieves Major Progress: Grayscale Trust and USDC Launch

The Sui ecosystem recently made significant advances, including the launch of Grayscale Trust and USDC stablecoin on Sui. The trust product will provide institutional investors with access to Sui, likely boosting capital inflows. The USDC launch adds mainstream stablecoin support, enhancing liquidity and usability.

As a blockchain based on the Move language, Sui has attracted much attention since its release. Its innovative parallel execution model and asset-oriented architecture offer a new performance experience. The addition of Grayscale Trust and USDC indicates that the Sui ecosystem is gradually improving, providing better infrastructure for both institutions and regular users.

Analysts believe that Grayscale Trust and USDC will bring fresh momentum to Sui’s development. Institutional inflows could foster ecosystem growth, and USDC’s liquidity support will underpin DeFi applications. Nonetheless, Sui remains in early development, and its long-term prospects need more time to prove.

3. Aptos Ecosystem Faces New Challenges: User Concerns Over Development Direction

Despite rapid recent growth, Aptos faces new challenges. Community members have expressed doubts about the foundation’s direction, citing a lack of clear roadmap and vision. This could impact Aptos’s long-term development.

Founded by former Meta employees, Aptos has gained attention for its performance and innovative design. Its ecosystem is expanding rapidly, with numerous DeFi and NFT projects. However, the foundation’s ambiguous statements about development plans have raised user concerns.

Analysts suggest the Aptos Foundation should clarify its roadmap and communicate effectively with the community. Clear direction is crucial for rallying support and ensuring sustainable growth. Otherwise, the ecosystem risks becoming disorganized, affecting future progress. The foundation should also strengthen community engagement, listening to feedback and involving users in ecosystem development.

4. Movement Ecosystem Highly Anticipated: Move Language Sets Itself Apart

As the only Move-based blockchain project that has yet to launch a token, Movement ecosystem is highly anticipated. Its innovative Move language and strong performance give it unique advantages, with potential to become a flagship in the Move ecosystem.

Move is a resource-oriented programming language developed by Meta, designed to enhance blockchain security and composability. Compared to Solidity and other smart contract languages, Move features stricter resource management, effectively preventing vulnerabilities like re-entrancy attacks. Its modular structure also allows flexible contract composition.

Thanks to these innovations, the Movement ecosystem has attracted widespread attention. Analysts believe it could become a leading project within the Move ecosystem, offering a new user experience. However, it is still in early development, and its future performance remains to be seen. Many look forward to Movement leveraging Move’s strengths to bring more innovation to blockchain.

4. Economic Developments

1. Fed Slows Rate Hikes, Inflation Remains Elevated

The U.S. economy faced a challenging period in 2025. Although GDP growth slightly rebounded in Q3, inflation remained high, and unemployment increased. Latest data show that Q3 annualized GDP growth was 2.1%, up from 1.6% in the previous quarter. However, the core Personal Consumption Expenditures Price Index (PCE) rose 5.8% year-over-year, well above the Fed’s 2% target. Unemployment rose from 3.5% earlier in the year to 4.2%.

At the November Federal Open Market Committee (FOMC) meeting, the Fed decided to hike interest rates by another 50 basis points, raising the federal funds target range to 4.25%-4.5%. This was the sixth consecutive rate increase but with a smaller hike than previous ones. Powell stated that inflation remains a serious concern, and the Fed expects to continue raising rates to control inflation, though future hikes may slow further.

This decision elicited mixed market reactions. Some analysts see the slower pace of rate hikes as beneficial for easing recession risks. Others worry that persistent high inflation could force the Fed to tighten further, risking a hard landing.

Goldman Sachs Chief Economist Jan Hatzius said, “While the Fed signals slower increases, inflation remains a concern. Achieving a ‘soft landing’ requires inflation to decline significantly and stay low. That will be a difficult process requiring patience and resolve.”

2. China’s Economy Accelerates Recovery, Policy Support Continues

After the shocks of 2024’s pandemic and slowdown, China’s economy showed strong signs of recovery in 2025. Latest data indicate Q3 GDP grew 6.8% year-over-year, rebounding from earlier months. Key indicators like industrial output, fixed asset investment, and consumption also improved to varying degrees.

This recovery largely reflects government macro policies, including increased infrastructure investment, tax cuts, and easing COVID-19 measures to boost economic vitality. The People’s Bank of China has also repeatedly lowered reserve requirement ratios and loan interest rates to inject liquidity into the real economy.

During the November Central Economic Work Conference, Chinese leaders emphasized continuing proactive fiscal policy and prudent monetary policy, setting key tasks for 2026. These include expanding domestic demand, promoting balanced regional development, and fostering technological independence.

Market experts generally see China’s economic foundation as solid but acknowledge risks like real estate sector issues and slowing global demand. The government may further intensify policy efforts to solidify the recovery.

“China is at a critical transition, needing to accelerate supply-side structural reforms while maintaining overall stability,” said Yuan Gang, President of Renmin University’s Chongyang Financial Research Institute.

3. Europe Energy Crisis Worsens, Economic Outlook Dims

In 2025, Europe’s economy has remained sluggish, mainly due to the ongoing energy crisis worsened by the Russia-Ukraine conflict. Russia sharply reduced natural gas supplies to Europe, causing energy prices to soar, significantly raising production costs and living expenses.

According to Eurostat, in Q3 2025, eurozone GDP grew just 0.2% year-over-year—the lowest since Q1 2009. Major economies like Germany and Italy experienced contraction. Inflation in the eurozone hit 10.6% in November, far above the European Central Bank’s 2% target.

EU countries have taken measures such as limiting natural gas use and accelerating renewable energy development. However, due to the difficulty of replacing energy supply in the short term, shortages are expected to persist.

The ECB raised interest rates by 75 basis points in November, bringing key rates to 2.5%, and signaled continued hikes to curb inflation. Yet, experts warn that with high energy prices, rate hikes may be ineffective or even worsen recession risks.

“Europe faces stagflation—high inflation combined with economic slowdown,” said Deutsche Bank chief European economist David Fuchs. “If the Russia-Ukraine conflict isn’t quickly resolved, Europe’s outlook will worsen.”

In summary, major economies worldwide face many challenges in 2025, balancing inflation control with economic growth will be a key policy focus.

5. Regulation & Policy

( 1. Chinese Authorities Release New Regulations, Stablecoins Classified as Illegal Financial Activities

The People’s Bank of China recently held a meeting with the Ministry of Public Security, Cyberspace Administration, and 11 other departments to coordinate efforts against virtual currency trading and speculation. The meeting emphasized that virtual currencies do not have the same legal status as legal tender, are not legally redeemable, and should not be used as currency in the market. Related activities are deemed illegal financial activities.

The meeting first explicitly defined stablecoins as a form of virtual currency and included them in regulatory scope. Stablecoins, which have emerged recently, aim to maintain price stability by pegging to fiat currencies. However, the meeting noted that current stablecoins cannot effectively meet customer identification and anti-money laundering requirements, and pose risks of being used for money laundering, fundraising scams, and illegal cross-border transfers.

This policy reflects increased regulation of virtual currency sectors by Chinese authorities. Experts say that explicitly classifying stablecoins as illegal financial activities provides a legal basis for future anti-money laundering and cross-border capital flow regulations, helping to maintain financial order.

Market reactions are mixed. Supporters argue that regulating stablecoins can prevent financial risks and protect investors. Critics worry that excessive restrictions could hinder financial innovation and industry development. Overall, industry insiders hope regulators will strike a balance between risk prevention and fostering innovation.

) 2. Japan to Impose 20% Flat Tax on Cryptocurrency Transactions to Reduce Investor Burden

Japan’s government is planning to revise its crypto transaction taxation policy to impose a uniform 20% income tax on all crypto gains, regardless of transaction size, aligning it with taxes on stocks and investment trusts. The goal is to reduce tax burdens and stimulate the domestic trading market.

Currently, Japan taxes crypto gains through a comprehensive system, where gains are combined with other income like wages or business income, and taxed at progressive rates up to 55%. The high rates and complex calculations are viewed as barriers to crypto investment.

The FSA plans to submit amendments to the Financial Instruments and Exchange Act in the 2026 session, tightening regulation of crypto trading. The amendments will explicitly prohibit insider trading based on undisclosed information and require crypto issuers to disclose relevant information.

Industry experts believe this will ease investor burdens and improve market transparency. However, some caution that overregulation could stifle innovation; a balanced approach is necessary.

With tax reforms underway, domestic adoption of crypto-related investment trusts and other products is expected to grow, offering investors more options.

( 3. SEC Chair Promises Strengthened Crypto Oversight to Protect Investors

SEC Chairman Gary Gensler recently pledged to increase regulatory oversight of the crypto sector to protect investors.

Gensler stated that the crypto market currently faces issues such as lack of transparency, manipulation, and money laundering. The SEC will cooperate with other regulators to develop a comprehensive regulatory framework that ensures fair and orderly operation of crypto markets.

Specific steps include requiring crypto issuers to comply with securities laws and disclose information; increasing oversight of exchanges and intermediaries to prevent market manipulation; and intensifying enforcement against illegal activities.

Gensler emphasized that the SEC’s goal isn’t to hinder innovation but to create a fair environment conducive to innovation. He urged the industry to proactively embrace regulation to gain public trust.

Industry insiders welcome this stance. Renowned crypto investor Anderson believes that reasonable regulation benefits industry health in the long run. Others worry that overregulation could kill innovation, and that the SEC must balance regulation with support.

Overall, Gensler’s remarks reflect growing regulatory attention to cryptocurrencies, with future oversight likely to intensify.