December’s global financial markets are putting on a spectacular show. The Fed and the Bank of Japan—two heavyweight players—are about to pull off “opposite operations” in the same time window: one is preparing to cut rates and inject liquidity, while the other is gearing up to raise rates and tighten policy. When was the last time we saw this “Fed loosens, BOJ tightens” combo?

Let’s start with the Fed. The market already sees a 25 basis point rate cut in December as a done deal, with nearly a 90% probability. Weak employment data has given the Fed a reason to ease. In theory, rate cuts are bullish for risk assets like BTC—when liquidity loosens, capital naturally flows to higher-yield opportunities. Bitcoin’s “digital gold” narrative certainly holds up in this context.

But why is BTC still stuck, grinding around $90,000? The real concern isn’t the rate cut itself, but the fear that after cutting, the Fed might say, “That’s it, don’t expect more.” This kind of “hawkish rate cut” is what makes people hesitate. You get the candy, but you’re told there won’t be any more—so is that good news or bad news?

Now look at the Bank of Japan—the situation is completely different. The latest signals show the probability of a December rate hike has soared to over 76%. Core inflation has exceeded the target, and the decades-long negative interest rate policy might be coming to an end. The yen has been surging, Japanese stocks have taken a hit, and government bond yields are spiking—all reactions to expectations of a rate hike.

If Japan really does hike rates, those who’ve been borrowing cheap yen to invest in higher-yielding assets (“carry trades”) might have to unwind their positions on a large scale. That’s no small amount of money, and once it flows back, the global capital landscape will have to reshuffle.

What about the crypto market? With these two forces colliding, BTC and ETH might actually benefit. When there’s a big crack in the traditional currency system, money needs a more stable place to park. Mainstream coins are the obvious choice, and some early, high-conviction projects might also catch a tailwind. For example, the Musk-themed puppies project, which has been getting some attention lately—though it’s risky, people are definitely watching.

That said, there are just too many variables in this macro game. Whether the Fed is really loosening or just pretending, and if the Bank of Japan might change its mind at the last minute—only time will tell.

What do you think: will this round flood the market with liquidity, or drain the pool dry?