The Fed is about to cut interest rates, while the Bank of Japan is preparing to raise rates—two super central banks are pivoting at the same time, but in completely opposite directions. This policy hedging game is turning the global capital markets into a mess.

To be honest, after watching the macro liquidity and its correlation with the crypto space for so long, I can guarantee: December 2025 will be a turning point. There’s an 84.9% chance the Fed will cut by 25 basis points, and the Bank of Japan’s chance of raising rates has soared above 80%. The last time I saw such a sense of division was… actually, I’ve basically never seen such a split in operations.

Let’s talk about the Fed first. The meeting on December 9-10, and a rate cut is almost a certainty. But here’s the issue—this rate cut might be very “schizophrenic.” What does that mean? On the surface, they’ll pump liquidity, but Powell will most likely cool things down at the press conference, hinting not to expect too many cuts next year.

Why so conflicted? Because inflation hasn’t been fully tamed, and economic growth is starting to show signs of fatigue. Powell is now like a tightrope walker, with price pressure on the left and recession risk on the right. Every move has to be cautious, for fear of stepping into a void.

In contrast, the Bank of Japan has been holding back for 17 years, and this time they’re really going for it. The historic rate hike is just around the corner, and the market is starting to bet on the exact timing.

What does this policy misalignment actually mean? Simply put, capital flows are about to be reshuffled. U.S. dollar rates are heading down but with tightening expectations, and the yen is about to end its negative interest rate era—these two forces intertwine. How BTC and ETH, these risk assets, will move in the next half year is really crucial.