Binance Research says bitcoin could benefit from a slowdown in the pace of global monetary tightening, even while interest rates stay elevated. The report also points to the Federal Reserve's December decision as a key test, with futures markets pricing a quarter-point rate increase.
Bitcoin could gain from a slower pace of global monetary tightening even as interest rates remain elevated, according to Binance Research. Its November 2026 Monthly Market Insights report argues that the speed at which tightening spreads across major economies may matter more for bitcoin than the actual level of rates.
Tightening momentum has slowed since July
According to the report, eight of the Group of 10 (G10) central banks raised rates over the preceding six months, while two kept rates unchanged. However, the pace at which tightening spread across these economies has slowed since peaking in July.
The researchers used a monetary policy diffusion index that tracks whether central banks have raised, lowered, or maintained rates relative to six months earlier. The index remained elevated at 0.8, but its six-month change had moderated from the July peak.
Binance Research found a negative 0.62 correlation between changes in the index and bitcoin's six-month returns since 2021. That suggests BTC has historically performed better when the momentum of global tightening slows.
Past cycles offer the evidence
Binance Research pointed to the previous tightening cycle. Bitcoin bottomed in November 2022, even though the diffusion index remained at its peak, and its six-month returns turned positive in February 2023, before G10 central banks began easing.
The researchers also cited 2024, when widespread easing coincided with bitcoin's strongest six-month performance of that cycle, with returns exceeding 160% in March.
The Fed's December decision looms
The report suggests a similar transition could be developing. Assuming no further policy changes, the index would stay at 0.8 while its six-month momentum measure could decline to approximately 0.3 by January 2027.
However, the analysis does not establish that slowing tightening will necessarily trigger a sustained recovery. Inflation, Treasury yields, and broader investor risk appetite remain important variables.
At the time of the report, futures markets assigned an approximately 80% to 85% probability to a quarter-point Fed rate increase in December, while the 10-year U.S. Treasury yield hovered around 5%. A hawkish surprise could therefore prolong pressure on cryptocurrencies, even if the broader global tightening cycle keeps losing momentum.
Source: Bitcoin News
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