On December 2nd, Bitcoin recorded a price surge above $87,000, amidst optimistic predictions for January 2026. Also, the US Fed announced the end of QT yesterday, injecting $13,5 billion into the banking system. Meanwhile, the chances for an upcoming interest rate cut this month are surging, fueling BTC’s price recovery, among other factors.
Bitcoin Price Action
At the moment of writing this article, BTC is trading in the green, above $86,000, after surpassing the $87,000 level earlier today.
BTC price rebounded at current levels after dropping below $84,000 on December 1st, amidst optimistic predictions.
The digital asset could maintain an upward trajectory, due to multiple reasons, including continued institutional interest, clearer regulations and pro-crypto legislation, and the Fed’s latest moves.
Bitcoin New 2026 ATH Predictions
The latest BTC price predictions see the digital asset hitting a new ATH in January 2026.
Tom Lee, BitMine’s chairman, adjusted his previous prediction that BTC could reach new heights of $250,000 by the end of 2025, saying that he believes that the asset could reach a new ATH by the end of January 2026, during a recent CNBC interview.
Also, Grayscale Research revealed via a December 1st report that BTC price will potentially make new highs next year, highlighting that the four-year cycle thesis could prove to be incorrect due to the following reasons:
- Unlike the past cycles, there was no parabolic price increase during this bull market that might suggest overshooting.
- BTC’s market structure has changed, with new capital coming largely via ETPs and DATs, rather than retail exchanges.
- The broad macro market backdrop still looks favorable for BTC and crypto.
Potential Price Triggers for BTC
There are various reasons why Bitcoin will resume its rally and reach new ATHs soon, despite the latest FUD in the industry.
Crypto Selling “Supposed Reasons” Debunked
Jeff Dorman, Arca CIO, said on December 1st, via X, that Wall Street is seeing the same bullish signs as him, revealing that the “supposed reasons” for crypto selling off are debunked easily or have reversed, noting that:
- MSTR is not selling.
- Tether is not insolvent.
- DATs are not selling.
- NVDA is not blowing up.
- The Fed is not turning hawkish.
On the other hand, there are multiple reasons to stay optimistic, according to Dorman, including the following:
- The US Fed announced the end of QT.
- Equity, credit, and gold/silver markets continue to see ATHs every month.
- AI demand is still strong.
- Consumer spending is strong.
- The Fed is expected to cut interest rates this month, with chances surging above 87%.
Diving into one of the strangest crypto sell-offs ever.
Wall Street is seeing all of the same bullish signs that I’m seeing — equity, credit and gold/silver markets are launching to ATHs every month because the Fed is cutting rates, QT is ending, consumer spending is strong,…
— Jeff Dorman (@jdorman81) December 1, 2025
Institutional Interest Continues, Strategy Raises BTC Holdings
Institutional interest in BTC continues, while, despite recent rumours, Strategy is not selling. On December 1st, Michael Saylor announced new BTC acquisitions, and Strategy now holds 650,000 BTC worth over $56 billion at current prices.
Strategy has acquired 130 BTC for ~$11.7 million at ~$89,960 per bitcoin. As of 11/30/2025, we hodl 650,000 $BTC acquired for ~$48.38 billion at ~$74,436 per bitcoin. $MSTR $STRC $STRK $STRF $STRD $STRE https://t.co/UkWX7PRHms
— Michael Saylor (@saylor) December 1, 2025
US Fed Latest Announcements
The Fed announced the end of QT on December 1st, freezing its balance sheet at $6,57 trillion, which means that it will no longer remove money from the financial system, opening up huge opportunities for crypto.
It’s also worth noting that since June 2022, the Fed and central banks have withdrawn around $2.4 trillion from global markets, marking the biggest money drain ever, pushing interest rates higher, and boosting nations’ debts.
The Fed also pumped $13.5 billion into the US Banking System via overnight repos, marking the 2nd largest liquidity injection since Covid, and surpassing the peak of the Dot Com Bubble, as highlighted by Barchart.
The Old Money System Crisis
The Fed’s latest move signals an ongoing traditional financial system crisis. The repo market provides short-term dollar funding for financial institutions – banks borrow cash overnight with US Treasuries as collateral.
The repo demand increases when banks require liquidity to stabilize balance sheets, and such spikes can indicate tightening credit conditions or collateral pressures across institutions.
Researcher Rob Cunningham, cited by Trading View, highlighted that the US financial system is running on emergency tools originally intended for rare crises:
- Banks have less cash, with unrealized losses elevated.
- Companies find it harder to obtain loans.
- The government pays more interest on its debt.
- Short money lending gets riskier.
A New Financial System is Rising
While the traditional financial system is weakening, a new one is on the rise, with Bitcoin and DLT at its core. Clearer regulations in the US via the GENIUS Act and the CLARITY Act will help establish clear rules and full transparency for the ecosystem.
Also, tokenized RWAs and new digital trade systems are enabling countries to move value faster, cheaper, and without needing intermediaries. Recently, BlackRock highlighted that tokenization is shaping the next evolution of global markets by:
- Modernizing market infrastructure
- Enhancing efficiency
- Boosting transparency and access by connecting traditional and digital finance
Bitcoin, born after a global financial crisis, is here to fix money, offering an alternative based on truth and incorruptibility.
