Decisive Moment! Can the Fed’s Policy Shift Help Bitcoin Sprint to $100,000?

Bitcoin’s price has recently diverged sharply from traditional US equities (especially tech stocks): since November, Bitcoin has corrected by 19%, while the S&P 500 Index is less than 1% away from its all-time high. Analysts point out that the end of this divergence may be driven by a “perfect storm”—the Federal Reserve’s “policy pivot” toward easing, combined with growing credit concerns over the massive debt loads of tech giants. With the Fed officially halting quantitative tightening on December 1 and opening the door to rate cuts, the market is now pricing in an 87% probability of a rate cut at the December meeting. The release of massive liquidity, coupled with capital outflows from fixed income and high-risk tech debt, could together build the grand narrative for Bitcoin to challenge the $100,000 psychological level before year-end.

100 Days of Volatility: Where Did the Historic Divergence Between Bitcoin and US Stocks Come From?

In recent months, financial markets have painted a rare picture: on one side, technology stocks and the S&P Index are hitting new highs, buoyed by the AI boom, while on the other, Bitcoin has pulled back nearly 20% from its November high and entered a period of volatility. This “stocks up, crypto down” divergence breaks with the traditional view that the two typically move together as risk assets. A deeper look reveals two competing market narratives: the traditional stock market is trading on the promise of unlimited growth from AI and higher valuations in anticipation of rate cuts, while the crypto market is still digesting previous gains, undergoing healthy deleveraging, and waiting for clearer macro liquidity signals.

However, such extreme divergence is rarely sustainable, and the market will eventually seek a new equilibrium. Currently, Bitcoin’s price has hit the support area around $88,000, while the S&P Index remains at historic highs, bringing the “valuation scissors gap” to an extreme level worth watching. Historically, when one asset class accumulates excessive risk due to over-optimism (like tech stocks with high leverage), and another is undervalued due to excessive pessimism, large-scale capital rotation can be triggered at any time. Bitcoin’s recent weakness may actually be setting the stage for a strong rebound ahead.

Such a shift in market structure requires a powerful catalyst. At present, this catalyst is likely to come from the world’s top central bank—the Federal Reserve. Any subtle shift in its monetary policy is like a boulder thrown into a calm lake, setting off a chain reaction across asset classes. For Bitcoin, which is highly sensitive to global liquidity, this policy-driven “lifeblood” may be the key to ending the current consolidation and starting a new trend.

The Fed’s “Policy Pivot”: The Key Turning Point from Draining to Injecting Liquidity

All eyes are on the Fed’s upcoming decisions. A fundamental shift has already occurred: the Fed officially halted its “quantitative tightening” policy on December 1. Simply put, this means the central bank is no longer actively draining liquidity from the financial system. Over the past six months, the Fed’s balance sheet has shrunk by $136 billion, effectively pulling a large amount of cash from the market. The end of this process is itself an implicit easing signal.

More aggressive market expectations are reflected in interest rate futures. According to the CME FedWatch Tool, traders now put the odds of a rate cut at the December meeting at 87%, and have fully priced in three rate cuts by September 2026. Interest rates are the anchor of asset pricing; once a rate cut cycle is established, the impact will be far-reaching. First, it directly reduces the appeal of fixed-income assets, as yields on newly issued bonds will decline accordingly.

Currently, US money market funds are sitting on a record $8 trillion in cash. This capital is like “thirsty money” gathered around a dried riverbed, eagerly searching for higher-yielding “reservoirs.” When the risk-free rate falls and bond yields become lackluster, this vast pool of money will be forced to look elsewhere—toward stocks, commodities, and scarce alternative assets like Bitcoin. The Fed’s policy shift is paving the way for a potential, epic capital rotation.

Key Macro Variables for the $100,000 Breakout

Fed’s key move: quantitative tightening stopped as of December 1

Liquidity contraction over past 6 months: $136 billion

Money market fund cash holdings: record $8 trillion

Market rate cut expectations: 87% probability at December meeting; three cuts expected by September 2026

Core logic: Lower rates → fixed-income assets lose appeal → capital seeks scarce assets

The Tech Giants’ “Achilles’ Heel”: Could Massive Debt Trigger a Credit Crisis?

Aside from monetary policy, another force that could drive capital toward Bitcoin comes from within the currently thriving tech stocks: surging credit risk. A notable warning sign is that the cost of credit default swaps (CDS) for global software giant Oracle has soared to its highest level since the 2009 financial crisis. As of the end of August, Oracle’s debt (including lease liabilities) reached $105 billion, making it the largest non-bank issuer in the Bloomberg US Corporate Bond Index.

What is the market worried about? On one hand, the national-level AI race, exemplified by Trump’s “Genesis Mission,” is driving tech companies to engage in massive capital expenditures and debt financing in order to compete for computing power and market share. On the other hand, investors are beginning to question whether these huge outlays will translate into matching returns. Citi’s credit strategy report notes, “Investors are increasingly worried about how much more debt supply lies ahead.” When the market starts paying steep premiums for credit default swaps to hedge tech giants’ debt risk, it signals that some smart money is already preparing for the worst-case scenario.

Bank of America strategist Michael Hartnett points out that if the Fed signals a pause in rate hikes, the probability of a broad economic slowdown will rise significantly. This uncertainty, combined with concerns about an over-reliance on stimulus-driven growth, has strengthened the “digital gold” narrative for Bitcoin. For institutional capital seeking to reduce exposure to traditional tech stocks, Bitcoin’s absolute scarcity of 21 million coins and its independence from corporate balance sheets make it a highly attractive hedge and allocation choice.

The Path to $100,000: The Triple Play of Liquidity, Risk, and Scarcity

In summary, the path for Bitcoin to challenge $100,000 before year-end is no longer a pipe dream, but is instead woven from three clear logical threads. The first is the “liquidity thread”: the Fed’s halt of quantitative tightening and the prospect of rate cuts will systematically boost risk appetite and available capital in financial markets, providing a floor and upward momentum for all risk assets, including Bitcoin.

The second is the “risk transfer thread”: Tech stocks, especially those saddled with heavy debt to finance the AI arms race, are accumulating credit risk. Should market sentiment reverse, or a negative credit event occur at a major company, funds could flow out of overvalued tech debt and equities. This capital, in search of a safe haven and genuine scarcity, may well see Bitcoin as an ideal destination.

The third, and most fundamental, is the “scarcity value re-rating thread.” Against a backdrop of potential fiat devaluation (due to easing policies) and rising risk in traditional credit assets, Bitcoin—as an absolutely scarce, algorithmically guaranteed, debt-free asset—will see its intrinsic value reassessed on a new scale. When even a small fraction of the $8 trillion in money market funds is allocated to Bitcoin, the resulting buying power will be phenomenal.

Therefore, the current divergence between Bitcoin and US stocks may be the eve of a major asset price revaluation. $100,000 is not just a psychological milestone, but a crucial test of whether the above macro narratives will be realized. For investors, closely monitoring the Fed’s meeting statements and dot plots, changes in tech giant credit spreads, and Bitcoin ETF fund flows will be core indicators to judge whether this “perfect storm” is arriving as anticipated. The market always moves forward amid uncertainty, and right now is a pivotal moment when macro variables and crypto asset characteristics are resonating.