Market update - December 19th, 2025

Markets slide despite macro clarity

In a macro- and central-bank heavy week, cryptocurrency markets continued their recent downward trend, with Bitcoin down 2% between last Friday and Thursday. The Bank of England cut its base rate by 25bps to 3.75%, while the ECB left rates unchanged at 2%. All eyes, however, have been on the delayed US jobs and inflation reports, which provided much-awaited clarity on the state of the US economy, the primary driver of global financial markets.

Sticky inflation and mixed labour data

This week’s jobs report, covering November and delayed October figures, painted a mixed picture. The US economy shed 105,000 jobs in October and regained 64,000 in November. The figures, however, are noisy. As expected, the October print was dragged by the public sector, which shed 157,000 positions, with no apparent recovery in November. Education, Construction and Professional jobs lead the gains during the month. Markets have been indifferent, with the implied January rate cut odds flat at 24.4%. While both prints suggest an aggregate contraction in the labour market relative to September, this may not be enough to warrant an early 2026 rate cut. Equities ignored the news and resumed their downward trend, while Bitcoin only partially recovered from the overnight selloff ahead of the release.

Another key focus this week was the delayed November CPI report, which came in at 2.7%, considerably below consensus expectations of 3.1%. Although significantly below pandemic levels and estimates, inflation has remained persistently above the Fed’s 2% target, potentially resulting in fewer rate cuts into 2026. However, in recent interactions with the press, Fed officials have dismissed concerns about a renewed acceleration in inflation, while noting that the impact of tariffs is likely to be one-off and short-lived. In any case, the Fed appears in no rush to cut aggressively, leaving liquidity tighter for longer, and limiting near-term positive catalysts for Bitcoin.

The silver lining has been fund flows, with a third consecutive week of net inflows, at US$864 million, reflecting a cautious, but opportunistic investor mood. Strategy also ramped up its Bitcoin acquisitions, adding 10,645 bitcoin (US$980 million) to its balance sheet, providing additional support to prices.