Bitcoin And The 2026 Fed Shift: Expert Says Markets Aren’t Ready

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Macro strategist Alex Krüger is tying Bitcoin’s next macro chapter directly to the coming reshuffle at the Federal Reserve, warning that investors are underpricing how far US rates could fall under a Trump-aligned central bank.

In a long X post titled “2026: The Year of the Fed’s Regime Change,” he argues that “the Federal Reserve as we know it ends in 2026” and that the most important driver of asset returns will be a new, much more dovish Fed led by Kevin Hassett. His base case is that this shift becomes a key driver for risk assets broadly and Bitcoin in particular in 2026, even if crypto markets are currently trading as if nothing fundamental has changed.

Why The Federal Reserve Will Dramatically Change

Krüger’s scenario is anchored in personnel. He notes that prediction platform Kalshi put the odds of Hassett becoming chair at 70% as of 2 December, and describes him as a supply-side loyalist who “champions a ‘growth-first’ philosophy, arguing that with the inflation war largely won, maintaining high real rates is an act of political obstinacy rather than economic prudence.”

A few hours after Krüger’s thread, Trump himself added fuel, telling reporters at the White House that he would announce his Fed pick “early next year” and explicitly teasing National Economic Council Director Kevin Hassett as a possible choice, after saying the search had been narrowed down to one candidate.

To explain how this would translate into policy, Krüger reconstructs Hassett’s stance from his own 2024 comments. On 21 November, Hassett said “the only way to explain a Fed decision not to cut in December would be due to anti-Trump partisanship.” Earlier he argued, “If I’m at the FOMC, I’m more likely to move to cut rates, while Powell is less likely,” adding, “I agree with Trump that rates can be a lot lower.” Across the year he endorsed expected rate cuts as merely “a start,” called for the Fed to “keep cutting rates aggressively,” and supported “much lower rates,” leading Krüger to place him at 2 on a 1–10 dove–hawk scale, with 1 being the most dovish.

Institutionally, Krüger maps a concrete path: Hassett would first be nominated as a Fed governor to replace Stephen Miran when his short term expires in January, then elevated to chair when Powell’s term ends in May 2026. Powell, he assumes, follows precedent by resigning his remaining Board seat after pre-announcing his departure, opening a slot for Kevin Warsh, whom Krüger treats not as a rival but as a like-minded ally who has been “campaigning” for a structural overhaul and arguing that an AI-driven productivity boom is inherently disinflationary. In that configuration, Hassett, Warsh, Christopher Waller and Michelle Bowman form a solidly dovish core, with six other officials seen as movable votes and only two clear hawks on the committee.

The main institutional tail risk, in Krüger’s view, is that Powell does not resign his governor seat. He warns that this would be “extremely bearish,” because it would prevent Warsh’s appointment and leave Powell as a “shadow chair,” a rival focal point for FOMC loyalty outside Hassett’s inner circle. He also stresses that the Fed chair has no formal tie-breaking vote; repeated 7–5 splits on 50-basis-point cuts would look “institutionally corrosive,” while a 6–6 tie or a 4–8 vote against cuts “would be a catastrophe,” turning the publication of FOMC minutes into an even more potent market event.

On rates, Krüger argues that both the official dot plot and market pricing understate how far policy could be pushed lower. The September median projection of 3.4% for December 2026 is, he says, “a mirage,” because it includes non-voting hawks; by re-labeling dots based on public statements, he estimates the true voters’ median closer to 3.1%. Substituting Hassett and Warsh for Powell and Miran, and using Miran and Waller as proxies for an aggressive-cuts stance, he finds a bimodal distribution with a dovish cluster around 2.6%, where he “anchors” the new leadership, while noting that Miran’s preferred “appropriate rate” of 2.0%–2.5% suggests an even lower bias.

As of 2 December, Krüger notes, futures price December 2026 fed funds at about 3.02%, implying roughly 40 basis points of additional downside if his path is realized. If Hassett’s supply-side view is right and AI-driven productivity pushes inflation below consensus forecasts, Krüger expects pressure for deeper cuts to avoid “passive tightening” as real rates rise. He frames the likely outcome as a “reflationary steepening”: front-end yields collapsing as aggressive easing is priced in, while the long end stays elevated on higher nominal growth and lingering inflation risk.

What This Means For Bitcoin

That mix, he argues, is explosive for risk assets like Bitcoin. Hassett “would crush the real discount rate,” fueling a multiple-expansion “melt-up” in growth equities, at the cost of a possible bond-market revolt if long yields spike in protest. A politically aligned Fed that explicitly prioritizes growth over inflation targeting is, in Krüger’s words, textbook bullish for hard assets such as gold, which he expects to outperform Treasuries as investors hedge the risk of a 1970s-style policy error.

Bitcoin, in Krüger’s telling, should be the cleanest expression of this shift but is currently trapped in its own psychology. Since what he calls the “10/10 shock,” he says Bitcoin has developed “a brutal downside skew,” fading macro rallies and crashing on bad news amid “4-year cycle” top fears and an “identity crisis.” Even so, he concludes that the combination of a Hassett-led Fed and Trump’s deregulation agenda would “override the dominant self-fulfilling bearish psychology, in 2026” — a macro repricing he insists “markets aren’t ready” for yet.

At press time, Bitcoin traded at $92,862

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MWX Token (MWXT) - BitMart Listing - 04 Dec 2025

CoinMarketCal

When a token gets listed on a new exchange like BitMart, it increases the chance for more people to buy and trade it. This usually creates excitement and sometimes pushes the price up for a short time when trading starts. However, the effect may not last long if there is not strong demand. For MWXT, this listing could bring in new interest and more trading. Early holders sometimes use new listings to sell, so the price could also become more volatile. Watch trading on December 4, 2025, for movement. source

BitMart
@BitMartExchange
#BitMart is thrilled to announce the exclusive primary listing of MWX Token (MWXT) @mwx_ai
Trading pair: MWXT/USDT
Deposit: 12/3/2025 12:00 PM UTC
Trading: 12/4/2025 12:00 PM UTC
Learn more: https://t.co/n5nR4wdFuQ pic.twitter.com/SxlT0LHhjV
Dec 03, 2025

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Flare (FLR), XRP (XRP) - XRP Staking on Flare - 03 Dec 2025

CoinMarketCal

The launch of XRP staking on Flare could be a big event for both XRP and Flare. Staking allows holders to earn rewards, and it often leads to more people buying and holding the asset, which can help the price go higher. Also, this shows that XRP is gaining more use on different networks, which can be positive for confidence in the project. However, price moves depend on how many people join the staking program and overall market conditions. Still, it is likely to bring attention and possibly price growth. source

Flare ️
@FlareNetworks
One day to go. The flame is set.
Tomorrow, fire becomes yield, and XRP enters its staking era on Flare. pic.twitter.com/Gt2Z7wMs4a
Dec 02, 2025

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REI Network (REI), Stafi (FIS), VOXEL - Binance Delisting - 17 Dec 2025

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When Binance delists a coin, it often causes the price to go much lower, because Binance is the biggest exchange for trading volume. After the delisting, it becomes harder for people to buy and sell the tokens, so many traders may try to sell before the delisting, making the price fall. If you hold REI, FIS, or VOXEL, pay close attention, as there could be strong downward pressure leading up to December 17, 2025. Sometimes, small exchanges support the token after, but overall, this news is usually negative for the price. source

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@binance
Binance will delist FIS, REI, VOXEL on 17 Dechttps://t.co/HvkBPoBoTm
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Cayman Islands Web3 foundations jump 70% as CARF reporting rules arrive

Cointelegraph

New figures reveal a 70% year-on-year increase in Cayman Islands foundation company registrations, with more than 1,300 on the books at the end of 2024, and over 400 new registrations already in 2025.

These structures are increasingly being used as legal wrappers for decentralized autonomous organizations (DAOs) and as ecosystem stewards for major Web3 projects.

According to a press release from Cayman Finance, many of the world’s largest Web3 projects are now registered in the Cayman Islands, with at least 17 foundation companies with treasuries over $100 million.

Why DAOs are choosing Cayman

The Cayman foundation company has emerged as a preferred tool for DAOs that need to sign contracts, hire contributors, hold IP, and interact with regulators, all while shielding tokenholders from personal liability for the DAO's obligations.

The legal wake‑up call for many communities came in 2024 with Samuels v. Lido DAO, in which a US federal judge found that an unwrapped DAO could be treated as a general partnership under California law, exposing participants to personal liability.

The Cayman’s foundation company is designed to plug that gap, offering a separate legal personality and the ability to own assets and sign agreements, while giving tokenholders comfort that they are not partners by default.

Add in tax neutrality, a legal framework familiar to institutional allocators, and an ecosystem of firms that now specialize in Web3 treasuries, and it becomes clearer why more projects have quietly redomiciled their foundations to Grand Cayman.

Elsewhere, policymakers have made big promises but delivered patchwork. Donald Trump has repeatedly pledged to turn the United States into the “crypto capital of the planet,” but at the entity level, only a handful of states explicitly recognize DAOs as legal persons.

Switzerland remains the archetypal onshore Web3 foundation center, with the Crypto Valley region now hosting over 1,700 active blockchain firms, up more than 130% since 2020, with foundations and associations representing a growing share of new structures.

From light‑touch haven to compliance player

The surge in Web3 foundations coincides with a shift in Cayman’s own regulatory posture, with the arrival of the Organisation for Economic Co-operation and Development’s Crypto‑Asset Reporting Framework (CARF), which the Cayman Islands has now implemented via new Tax Information Authority regulations that take effect from Jan. 1, 2026.

CARF will impose due diligence and reporting duties on Cayman “Reporting Crypto‑Asset Service Providers” (entities that exchange crypto for fiat or other crypto, operate trading platforms, or provide custodial services), requiring them to collect tax‑residence data from users, track relevant transactions, and file annual reports with the Tax Information Authority.

Legal professionals note that CARF reporting under the current interpretation applies to relevant crypto-asset service providers, including exchanges, brokers, and dealers, which likely leaves structures that merely hold crypto assets, such as protocol treasuries, investment funds, or passive foundations, off the hook.

“The key question is whether your entity, as a business, provides a service effectuating exchange transactions for or on behalf of customers, including by acting as a counterparty or intermediary or by making available a trading platform.”

In practice, that means many pure treasury or ecosystem‑steward foundations should be able to continue benefitting from Cayman’s legal certainty and tax neutrality without being dragged into full reporting status, so long as they are not in the business of running exchange, brokerage, or custody services.

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Analyst Explains How JPMorgan, Vanguard and BoA “Absorbed” Bitcoin in Nine Days

Coinpedia

A new analysis from author and market commentator Shanaka Anslem Perera is catching attention from the crypto community.

Perera argues that between November 24 and December 2, 2025, the world’s biggest financial institutions executed a set of moves that effectively pulled Bitcoin into the center of traditional finance.

“In 216 hours, they captured Bitcoin.”

Four Giants, One Week, and a Very Clear Shift

Here’s what happened during that nine-day stretch.

JPMorgan filed new leveraged structured notes tied to BlackRock’s IBIT ETF.

Vanguard ended its long anti-crypto stance and opened its entire $11 trillion platform to Bitcoin, Ethereum, XRP, and Solana ETFs. Bank of America gave 15,000 financial advisers the green light to recommend 1-4% Bitcoin allocations starting January. Goldman Sachs bought Innovator Capital Management for $2 billion.

Taken alone, each headline is big. But together, Perera says the timing “approaches statistical implausibility.”

These firms control more than $20 trillion, and they all moved toward Bitcoin within the same week.

As Institutions Built, Retail Stepped Back

While Wall Street positioned itself, retail investors were heading for the exit.

November saw $3.47 billion in spot Bitcoin ETF outflows – the largest monthly withdrawal on record. IBIT alone lost $2.34 billion as investors sold below cost basis.

Meanwhile, sovereign wealth money was flowing in. Abu Dhabi tripled its Bitcoin holdings that same quarter. Perera describes it as the transfer from “weak hands” to “strong hands”.

The Absorption Started With ETFs

Perera points back to January 2024, when Bitcoin ETFs were approved. That turned Bitcoin from a self-custody asset into something advisors, banks, and brokerages could plug directly into their systems.

Since then, the infrastructure has only expanded.

Nasdaq moved to raise IBIT’s options limit by 40x, giving banks the hedging tools needed for structured products. JPMorgan’s new notes offer 1.5x upside with a 30% downside barrier – effectively turning Bitcoin into a yield-style product.

Vanguard’s reversal and Bank of America’s distribution network completed the mainstream funnel.

The Pressure on MicroStrategy’s Model

Another part of the shift is happening. MSCI is set to vote on excluding companies with more than 50% of assets in crypto – a direct blow to Strategy Inc. (formerly MicroStrategy), which sits around 90%.

Coin Guide (William Watson)
@CoinGuideWW
MSCI is considering a rule change that could NUKE MicroStrategy and therefore Bitcoin on Jan 15th:
Companies whose main business is holding crypto instead of operating a normal business may be excluded from their global stock indexes
Since Strategy holds massive amounts of… pic.twitter.com/ZdiubseDjQ
Dec 01, 2025

That exclusion could force $2.8B-$11.6B in selling.

Volatility Is the Last Barrier

Bigger IBIT options limits allow market makers to mute volatility through hedging. Lower volatility brings in pensions, insurers, and large wealth managers.

Regulatory clarity under the Trump administration – from the GENIUS Act to the push for a Strategic Bitcoin Reserve – accelerated this shift.

But the MSCI rule creates tension, since Trump-linked companies also hold large Bitcoin treasuries.

“Bitcoin Was Not Defeated. It Was Captured.”

Perera’s broader point is that the economics around Bitcoin have migrated.

ETFs now dominate ownership, most users pick convenience over custody, and the profits, fees, and flows sit inside Wall Street’s machinery.

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Further, 3iQ launch $100M fund that compounds returns in Bitcoin

Cointelegraph

United Arab Emirates-based digital asset manager Further Asset Management has partnered with Canadian crypto investment firm 3iQ to launch a $100 million hedge fund targeting institutional investors seeking structured exposure to cryptocurrencies, including a Bitcoin-denominated share class that reinvests gains directly into BTC.

According to a Wednesday announcement, the Further x 3iQ Alpha Digital Fund is a market-neutral, multi-strategy vehicle designed to deliver risk-managed exposure to liquid crypto markets under an institutional framework. The fund was seeded with capital from institutional investors, family offices and sovereign backers.

“We’re providing institutional-grade, risk-managed and scalable access to digital assets, including Bitcoin, within a structure that has successfully passed the rigorous institutional due diligence of leading global capital allocators,” Faisal Al Hammadi, managing partner at Further, said.

Pascal St-Jean, president and CEO of 3iQ, said that the fund’s structure enables investors to “confidently pursue double-digit potential returns.”

Related: Goldman Sachs Buys Innovator, Adds Bitcoin-Linked ETF To Lineup

Bitcoin-denominated fund class

One of the fund’s key features is its dedicated Bitcoin (BTC) share class, which allows qualifying investors to subscribe in BTC and receive returns in the same denomination.

The share class was anchored by a large in-kind contribution from an unnamed Abu Dhabi-based family office, giving participants exposure designed to steadily increase Bitcoin holdings while retaining long exposure to the asset.

Founded in 2012, 3iQ focuses on regulated products and services tailored for institutional and professional investors seeking exposure to digital assets within traditional compliance frameworks. The firm has been expanding its institutional crypto offering through infrastructure such as its Digital Assets Managed Account Platform.

Further operates as a UAE-based investment platform providing access to regulated opportunities across venture capital, structured products and digital assets.

Related: BlackRock exec says ‘perfectly normal’ as IBIT sees $2.3B outflows in Nov

Coinbase rolls out Bitcoin yield fund

The new Further x 3iQ Alpha Digital Fund comes as more players offer investors routes into crypto markets. In April, Coinbase announced plans to launch the Coinbase Bitcoin Yield Fund to give institutional investors outside the United States a way to earn returns on Bitcoin holdings.

The product targets a net annual yield of 4% to 8% and is aimed at meeting rising demand for income-generating crypto strategies among professional investors. The fund has attracted backing from several investors, including Abu Dhabi–based Aspen Digital, which is regulated by the Financial Services Regulatory Authority.

Magazine: 2026 is the year of pragmatic privacy in crypto — Canton, Zcash and more

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