Crypto Sell-Off Deepens as Bitcoin and Ethereum Lead Sharp Declines Amid Risk-Off Mood

Economic

Cryptocurrency

Summary:

Bitcoin and Ethereum plunged over 5% and 6.5% respectively on Monday, as global market caution and fresh regulatory warnings from China reignited a broad sell-off in digital assets.....

Major Cryptocurrencies Slide as December Begins

The cryptocurrency market resumed its downward trajectory on December 1, 2025, with Bitcoin falling to $86,273.68 down 5.5% and Ethereum plunging over 6.5% to $2,831.95 in early London trading. The losses marked a sharp reversal from recent attempts at recovery and underscored renewed investor anxiety across digital assets. Other major tokens also slumped, including Solana (down 7.7%) and Dogecoin (off 8.4%), signaling widespread risk aversion among crypto holders.

These declines highlight an intensifying correlation between cryptocurrency performance and broader market sentiment. As macroeconomic uncertainty grows, digital assets often positioned as speculative risk-on instruments are among the first to feel the impact when sentiment sours.

Broader Market Risk-Off Sentiment Spills into Crypto

The latest downturn coincides with a resurgence in global risk-off behavior. Concerns about overheated valuations in artificial intelligence stocks, ambiguous signals from the U.S. Federal Reserve ahead of its December 9–10 meeting, and deteriorating factory activity in China have dampened investor appetite across asset classes.

Cryptocurrencies, due to their volatility and speculative nature, have become increasingly sensitive to such shifts. The current climate mirrors periods earlier in the year when macroeconomic uncertainty triggered synchronized pullbacks across tech and crypto. The recent drop suggests that expectations of a potential Fed rate cut may not be strong enough to offset deeper structural fears especially if economic data remains mixed or geopolitical risks escalate.

Chinese Regulatory Crackdown Adds Additional Pressure

Sentiment in Asia was further dented by regulatory developments. The People’s Bank of China (PBoC) issued a public warning over the weekend, reaffirming its stance against illegal activities involving digital currencies. While details were limited, the statement contributed to a decline in Hong Kong-listed digital asset-related equities during Monday’s session.

This warning reflects a continued tightening of China’s approach to crypto markets, particularly after brief periods of speculative optimism earlier this year. By reinforcing regulatory restrictions, Chinese authorities have effectively removed one of the largest potential sources of institutional demand in the Asia-Pacific region. As a result, investor confidence weakened, and crypto-linked equities followed crypto tokens into negative territory.

Volatility Returns as Crypto Enters Uncertain December

The renewed sell-off in Bitcoin, Ethereum, and other digital assets marks a turbulent start to December, a month that has historically brought strength to risk markets. However, the convergence of regulatory pressure, macroeconomic uncertainty, and shifting market psychology has once again destabilized the crypto landscape.

Unless clarity emerges from upcoming Fed policy announcements or risk appetite revives across equity and tech sectors, cryptocurrencies may continue to face downward pressure in the short term. Traders and investors should be prepared for heightened volatility as 2025 closes out on a note of caution.

Source: CNBC

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Gerik

Economic

Mixed Market Mood Greets December's Arrival

As 2025 enters its final month, global investors are bracing for a complex finish to a year defined by rapid technological growth, geopolitical tension, and shifting macroeconomic conditions. The long-anticipated “Santa Claus rally” could yet materialize, particularly if the U.S. Federal Reserve delivers a quarter-point interest rate cut during its final meeting of the year scheduled for December 9–10. According to CME FedWatch Tool projections, there is now an 87.4% probability of such a move.

This expectation has buoyed hopes across equity markets, following a winning week for U.S. stocks, where all three major indexes gained in a shortened Thanksgiving session. The Nasdaq Composite closed higher for a fifth consecutive day, reflecting momentum in tech-heavy sectors.

Yet, optimism remains tempered by unresolved structural and political risks that could derail sentiment. As Lim Hui Jie of CNBC’s Daily Open aptly notes, “December is its landing strip,” signaling that markets are approaching a critical inflection point.

China's Manufacturing Retreats Despite Export Support

A significant drag on global sentiment comes from China’s manufacturing slowdown. November’s private PMI data confirmed an unexpected contraction in industrial activity, marking the first sub-50 reading in four months. Despite a rebound in new export orders fueled in part by a temporary trade truce with the United States the uptick failed to compensate for deeply rooted domestic weakness. Consumer demand remains sluggish, and confidence among Chinese manufacturers continues to erode.

The data suggest that while foreign trade provides short-term relief, the underlying drivers of China’s economy namely investment, property, and consumption are not yet aligned for sustained recovery. This imbalance poses risks for global supply chains, particularly in sectors reliant on Chinese manufacturing.

India's Growth Accelerates, Offering a Regional Contrast

In sharp contrast to China’s industrial retrenchment, India’s economy posted an 8.2% year-on-year GDP growth rate for Q3 2025, outperforming expectations. The expansion was supported by resurgent manufacturing, a buoyant construction sector, and strong domestic consumption. This reinforces India’s growing role as a counterbalance to China in Asia’s economic narrative and may further influence multinational investment strategies.

While this performance offers a positive signal for emerging market investors, it also introduces a divergence in regional policy expectations. With India’s economic engine revving up, monetary easing is less likely there, reinforcing the importance of localized policy responses across Asia.

Wingtech-Nexperia Dispute Highlights Supply Chain Vulnerabilities

A separate flashpoint emerged as tensions escalated between Dutch chipmaker Nexperia and its China-based unit Wingtech. In an open letter, Nexperia warned of “imminent production outages” across industries unless supply chain operations are stabilized. This public confrontation underscores the lingering fragility in semiconductor networks and adds to the overall narrative of technological decoupling and industrial fragmentation.

Such disputes pose practical risks to global production timelines and elevate the political risk premium for firms operating across U.S.-China-Europe supply corridors. The timing of this conflict during a seasonally critical quarter for electronics could amplify operational bottlenecks into early 2026.

Silver’s Silent Surge Amid Gold Buzz

One of the more surprising developments in commodity markets has been the under-the-radar rise of silver. While gold has dominated headlines, silver recently hit a new record high, and analysts are forecasting its value could double over the next few years. This bullish outlook is supported by both investment demand and industrial use, particularly in renewable energy and electronics. It also reflects growing hedging behavior among investors wary of equity volatility and monetary policy shifts.

In the travel sector, an unprecedented recall of 6,000 Airbus A320-series aircraft due to software issues linked to solar flares has caused widespread disruption. The European Union Aviation Safety Agency issued the directive after a JetBlue flight experienced an unexpected pitch-down event. The recall affected over half of the world’s narrow-body jets and came during one of the busiest global travel periods, straining airline operations from the U.S. to Australia.

This aviation disruption introduces additional short-term economic costs and may influence airline stocks and travel-related industries, particularly if delays extend through the December holiday window.

Holiday Cheer Competes with Caution

The final weeks of 2025 are poised at a fragile intersection of policy, geopolitics, and investor psychology. While Wall Street anticipates a supportive signal from the Federal Reserve, uncertainties surrounding China’s slowdown, tech supply chains, and military risks in regions like Venezuela could dampen momentum.

Markets may yet find joy in December if macroeconomic and geopolitical turbulence remains contained. But as the Airbus recall and semiconductor disputes show, shocks can emerge quickly in a globalized system already stretched thin. The next two weeks will be pivotal in determining whether 2025 ends on a hopeful or hesitant note.

Source: CNBC

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Daniel Carter

Political

Russian President Vladimir Putin signed an order to allow visa-free entry into the country for Chinese citizens as ties between the two nations continue to deepen.

Chinese citizens will be able to enter the country for 30 days for business and tourism starting from Monday, according to the order, which was published on a government website. The measure runs until Sept. 14 next year. A few categories of travelers, including journalists and students, will still require visas under the order.

Putin in September said that Russia planned to take the step after Beijing allowed visa-free entry into China for Russian citizens with ordinary passports as part of a trial.

China previously announced plans to expand its unilateral visa-free entry scheme as it tries to rev up tourism. Meanwhile, the Kremlin's February 2022 full-scale invasion of Ukraine has pushed Russia closer to China, which has remained an economic and diplomatic lifeline for Moscow.

Source: Bloomberg Europe

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Gerik

Economic

Stocks

Markets Enter December Cautiously After Volatile November

European equities kicked off the final month of 2025 on a weak note, with all major indices projected to open lower. According to IG data, the UK’s FTSE 100 was set to drop 0.26%, Germany’s DAX by 0.62%, France’s CAC 40 by 0.46%, and Italy’s FTSE MIB by 0.5%. This shift follows a choppy November that ended in positive territory for many markets, though concerns about overstretched valuations especially in the AI sector continued to cast doubt over long-term sustainability.

While last month’s volatility did not significantly erode market gains, investor caution remains prevalent as 2025 draws to a close. Much of this hesitancy is tied to both macroeconomic factors and global political developments that could affect market stability into 2026.

Rate Cut Expectations Dominate Monetary Policy Outlook

One key factor shaping sentiment is speculation surrounding the U.S. Federal Reserve's upcoming policy decision. With the Fed meeting scheduled for December 9–10, traders are currently pricing in an 87.4% probability of a 25-basis-point rate cut, according to the CME FedWatch Tool. This expectation reflects a market consensus that the Fed may act preemptively to support the U.S. economy amid signs of slowing job growth and waning inflation.

However, the timing and scale of potential rate adjustments continue to divide analysts, introducing a degree of policy-related uncertainty that has spilled over into European markets. Although no major economic releases are expected from Europe at the start of the week, investors are likely to remain cautious in the absence of fresh catalysts.

Ukraine-Russia Peace Talks Add Geopolitical Risk Premium

European investors are also closely monitoring the high-stakes diplomatic developments surrounding the war in Ukraine. This week, U.S. Special Envoy Steve Witkoff is scheduled to meet with Russian President Vladimir Putin in Moscow for further discussions on a peace framework.

This follows recent confirmation that Ukraine has tentatively approved a U.S.-backed 19-point peace proposal an amended version of a previously confidential 28-point plan negotiated by the U.S. and Russia. The original draft appeared to lean toward Russian interests, prompting further diplomatic engagement. Over the weekend, U.S. Secretary of State Marco Rubio met with Ukrainian officials in Florida and described the talks as "very productive," while acknowledging that significant differences still need to be resolved.

These geopolitical negotiations inject additional volatility into investor sentiment. Although progress on a peace deal could ultimately reduce risk in European markets, the current lack of resolution keeps tensions elevated and market positioning cautious.

Global Market Context: Mixed Sentiment in Asia and the US

The mixed tone was reflected in other global markets. Asia-Pacific trading began December unevenly, reacting to new Chinese factory data indicating another contraction in manufacturing activity. This industrial weakness, as previously noted, suggests that any recovery in Chinese demand remains fragile and is unlikely to boost European exports meaningfully in the near term.

Meanwhile, U.S. stock futures remained largely flat on Sunday night after closing the previous week with solid gains. Wall Street continues to benefit from seasonal momentum December has historically delivered strong returns, with the S&P 500 averaging gains of over 1% in the final month of the year since 1950, according to the Stock Trader’s Almanac. This seasonal trend may offer some indirect support to global risk appetite, but regional factors in Europe remain more dominant at present.

While Wall Street eyes a strong end to 2025, European markets have entered December weighed down by macroeconomic ambiguity and unresolved geopolitical risks. Investors are waiting for clarity from the Federal Reserve on interest rates and from diplomacy regarding Ukraine before committing further capital. With no major earnings or economic reports due from Europe at the start of the week, market momentum is likely to remain soft unless significant breakthroughs materialize on either front.

Source: CNBC

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Gerik

Economic

Taiwan Seeks Lower Tariffs Amid Strategic Trade Negotiations

Taiwan has confirmed its objective of securing a reduction in tariffs on exports to the United States from the current 20% rate down to 15%, according to senior officials speaking in Taipei on Monday, December 1, 2025. The proposed tariff adjustment is part of broader trade talks with the Trump administration and aligns with Taiwan’s long-term strategic efforts to deepen its economic footprint in the United States through investment and technology cooperation.

Taiwan’s chief trade negotiator, Jenni Yang, reiterated the target during a parliamentary session, clarifying that while economic collaboration with the U.S. is advancing, direct commitments to train American workers are not a ceondition of the negotiations. This distinction reflects a carefully calibrated approach: offering technological and infrastructure expertise without being bound by politically sensitive labor training obligations.

The ‘Taiwan Model’ And US Industry Revitalization

Taiwan continues to position its development framework centered on semiconductor-driven science parks as a blueprint for U.S. industrial revival. This “Taiwan model” emphasizes innovation ecosystems and infrastructure clustering to stimulate advanced manufacturing. Although training U.S. workers has been discussed informally, Taiwan has stopped short of including such initiatives as formal bargaining chips.

Taiwanese Economy Minister Kung Ming-hsin acknowledged that if firms like TSMC require assistance with workforce development, such support can be discussed separately but is not currently embedded within the trade negotiation terms. This separation implies a distinction between firm-level operational needs and state-level policy conditions, emphasizing Taiwan’s intent to retain strategic autonomy in deal-making.

TSMC’s Expanding Investment and Tariff Exemptions

Central to the trade dialogue is the Taiwan Semiconductor Manufacturing Company (TSMC), which is building out a $165 billion manufacturing footprint in Arizona. TSMC’s substantial U.S. investment shields its exports from the 20% tariff imposed on many foreign goods. This exemption aligns with U.S. policy under President Donald Trump, who announced in August that semiconductor imports would face tariffs up to 100%, excluding companies manufacturing domestically or committing to do so.

This preferential treatment illustrates a strong causal link between localization of production and tariff exemptions, incentivizing foreign firms to invest onshore. It also highlights the geopolitical importance of semiconductor security and supply chain resilience in the bilateral relationship.

Uncertain Timelines and Political Leverage

While Yang expressed the Taiwanese government’s desire to finalize the trade pact by the end of 2025, no definitive timeline has been disclosed. The fluid nature of the negotiations subject to evolving U.S. policy stances and ongoing talks over worker training suggests that while progress is likely, details remain subject to high-level political shifts.

Recent reports by Reuters indicated that U.S. negotiators may request broader commitments, including workforce training and investment in other advanced industries. However, Taiwan appears cautious in binding itself to such obligations, possibly to avoid domestic backlash or overextension of its industrial policy abroad.

Taiwan’s pursuit of tariff reduction reflects a pragmatic trade strategy built on capital investment, knowledge transfer, and geopolitical alignment. While the U.S.-Taiwan economic relationship continues to deepen particularly in semiconductors Taiwan has deliberately kept workforce training commitments off the table in formal negotiations. This move signals its intent to focus on industrial contribution rather than direct labor engagement, preserving flexibility while leveraging its competitive advantage in technology. Whether the deal is finalized this year may depend more on the evolving priorities of the Trump administration than on Taiwan’s preparedness.

Source: Reuters

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Justin

Central Bank

Forex

The Bank of Thailand plans to roll out additional measures to ease appreciation pressure on the baht and tighten oversight of gold-related foreign-exchange transactions after the currency strengthened about 1% over the past week.

The local currency's gains were driven by a weaker US dollar and increased foreign exchange selling from exporters; bond inflows; and gold traders amid a more than 4% jump in global bullion prices, Pimpan Charoenkwan, assistant governor for the central bank's financial markets, said in a statement on Monday.

The central bank has proposed raising the limit on foreign income that companies can keep offshore. The change, expected to take effect by year-end, is aimed at giving firms more flexibility in managing foreign revenues while helping reduce upward pressure on the baht.

The Bank of Thailand is also tightening scrutiny of gold-related flows. Financial institutions have been instructed to adopt stricter due-diligence procedures before processing such transactions, while the central bank has recommended that the Ministry of Finance require large gold traders to report transaction data to improve monitoring and assess the impact on the currency, she said in the statement.

"Financial markets remain highly uncertain, and the Bank of Thailand will continue to closely monitor baht movements and stand ready to manage excessive volatility to limit the impact on businesses," Pimpan said.

Source: Bloomberg Europe

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Winkelmann

Forex

Economic

The EURUSD pair is rising amid pressure on the US dollar and growing expectations of a more dovish Federal Reserve policy, currently trading at 1.1600.

EURUSD forecast: key trading points

· Traders are now pricing in an 87.6% probability of a Fed rate cut at the upcoming meeting

· The market expects three more Fed rate cuts next year

· Dovish expectations for the Fed increase the likelihood of further EURUSD growth

· EURUSD forecast for 1 December 2025: 1.1660

Fundamental analysis

The EURUSD exchange rate is strengthening for the sixth consecutive trading session. However, sellers continue to successfully defend the key resistance level at 1.1605, which has remained unbroken for four sessions.

The US dollar remains under pressure. Traders are pricing in an 87.6% probability that the Federal Reserve will deliver a final 25-basis-point rate cut of the year at the upcoming meeting. The market also expects three additional cuts next year.

Investors are reacting to reports that White House economic adviser Kevin Hassett is being considered as the leading candidate to replace Jerome Powell as Fed chair. Market participants believe such an appointment would align with President Donald Trump's preference for more accommodative monetary policy, increasing the likelihood of continued EURUSD upside.

EURUSD technical analysis

The EURUSD rate is rising slightly after breaking above the upper boundary of the corrective channel. Buyers keep prices above the EMA-65 line, confirming the dominance of bullish sentiment.

The EURUSD forecast for today suggests a minor bearish correction, after which renewed growth towards 1.1660 is expected. An additional signal in favour of further upside comes from the Stochastic Oscillator, with its signal lines turning down from overbought territory and approaching the support level.

A consolidation above 1.1615 will serve as a key indication of a fully resumed bullish impulse.

Summary

EURUSD technical analysis indicates sustained bullish momentum. Current expectations of a Fed rate cut and the potential appointment of a more dovish Fed chair increase pressure on the USD, supporting further upside potential in the pair towards 1.1660.