The Federal Reserve decides on interest rates Wednesday and the Bank of Japan follows Friday, with markets expecting both to stand pat. Traders aren't looking at the holds — they're pricing December hikes. FedWatch puts an 89.5% chance the Fed keeps its target at 3.75% to 4% this week, and an 82.3% chance it moves on December 9.
The stablecoin market spent the same week bleeding. Total market cap fell $2.19 billion between October 19 and 25, according to Lookonchain. Bitcoin walked into the central bank meetings below $80,000, down 0.27% over the past day.
December is the trade now
The odds of no Fed move in December climbed from 7.3% a month ago to 17.7%, so most of the market still expects tightening. That leaves the guidance from Fed Chair Kevin Warsh as the week's real event. A hold with hawkish language is one thing; a hold that hints at a pause into 2027 is another, and positioning will hinge on which one Warsh delivers.
Tokyo has a similar setup. The BoJ is expected to leave its policy rate at 1.25% after September's hike. More than 80% of economists in a Bloomberg survey see the next move coming in December, and Daiwa Securities says a formal acknowledgment that underlying inflation has hit 2% could open the door to a hike. Governor Kazuo Ueda's post-meeting comments will get the same scrutiny as Warsh's.
Stablecoins are leaving the building
The $2.19 billion contraction wasn't evenly spread. USDT and USDC balances on Ethereum fell $1.17 billion over seven days. Tron lost $495 million, the second-largest outflow among the top 15 chains. Arc was the outlier, adding $294 million.
Spot and derivatives volume fell in step. DEX spot volume dropped 12.21% week-over-week to $44.09 billion. Perpetual futures volume slipped 8.59% to $142.54 billion. Hyperliquid, the top perp DEX in Lookonchain's ranking, saw volume slide 8.50% to $51.68 billion, weekly revenue fall 10.17%, and USDT/USDC balances on the chain drop $184 million.
That's the shape of a market waiting on central banks rather than trading on them. Stablecoins are the dry powder, and the dry powder is shrinking.
Corporate treasuries keep buying
Not everyone is waiting. Strive bought 6,182 BTC, lifting its holdings to 43,000 BTC. BitMine added 10,452 ETH worth $24.13 million. Both purchases landed in the same week the FedWatch odds shifted, which says the treasury-buyer bid hasn't gone anywhere.
There's a precedent worth keeping in mind: in September, when the Fed hiked, Bitcoin rose from about $75,350 to above $76,100 within minutes. A hawkish hold this week wouldn't be the same event. But it's a reminder that the knee-jerk reaction to these decisions has recently run opposite to the textbook.
The week ahead
Wednesday's Fed statement and Warsh's press conference set the tone. Friday's BoJ decision and Ueda's remarks close it out. Between the two, the market gets one more week of stablecoin flow data — and if the outflows continue into November, the December hike debate will be happening against a thinner liquidity backdrop than the one traders are pricing today.
