New York Fed President John Williams said Friday there's still room to cut rates "in the near term," causing December rate-cut odds to surge from 35-40% to over 70% within hours.

Bitcoin bounced from overnight lows below $81,000 to reclaim $84,000 in morning U.S. hours.

Williams told the WSJ he views monetary policy as "modestly restrictive, although somewhat less so" after recent actions, adding downside risks to employment have increased while upside risks to inflation have eased.

The shift matters because Williams is a permanent voting member of the FOMC. His words carry more weight than regional Fed presidents.

And his timing, Friday morning, after a week of crypto liquidations, turned sentiment on a dime.

Here's the mechanic:

Bitcoin had dropped 5.5% on Thursday alone to hit $81,668, its lowest level since April and capping a week where it shed 12% and a month where it lost 20%.

But Williams' remarks confirmed what the market needed:

The Fed isn't locked into hawkish paralysis.

Liquidity relief remains on the table heading into December's final meeting.

Investor Signal

Williams' dovish pivot doesn't erase structural damage, but it reopens the liquidity pathway that crypto needs to stabilize. Watch for follow-through from other FOMC members or risk-on reversal fading as quickly as it arrived.

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JPMorgan warned this week that Strategy faces removal from major equity indices, including MSCI USA, MSCI World, and potentially the Nasdaq 100, as MSCI evaluates whether companies with digital-asset holdings exceeding 50% of total assets belong in traditional stock benchmarks.

The bank estimates $2.8 billion in forced passive outflows if MSCI excludes Strategy, and $8.8 billion if other index providers like Russell follow suit.

Strategy's stock sits just 3% above critical support at $172.50.

The company has fallen 40% in the past month, 68% from July peaks, and is now trading at its lowest level since early 2025.

Roughly $9 billion of Strategy's $59 billion market cap is held in passive index funds, ETFs and mutual funds that track the Nasdaq 100, MSCI USA, and MSCI World.

Index removal triggers mechanical selling. There's no discretion. Algorithms rebalance portfolios, dump shares, and reprice the stock lower, regardless of fundamentals.

MSCI's consultation period runs through December 31, with a final decision scheduled for January 15, 2026, and any exclusion taking effect in February 2026.

JPMorgan's strategist Nikolaos Panigirtzoglou said Strategy's recent decline, which has drastically outpaced Bitcoin's drop, directly reflects mounting concerns over index exclusion rather than crypto weakness.

But here's what makes this structural:

Strategy holds 649,870 Bitcoin at an average cost of $74,433.

At current BTC levels near $84,000, a further 15% drop would push the entire position into negative territory.

The company's modified NAV, its premium to Bitcoin holdings, has collapsed to just 1.1, the lowest since the pandemic.

That means the market now values Strategy almost purely on its Bitcoin, not its software business or Saylor's treasury playbook.

Michael Saylor responded this week, insisting Strategy is "an operating company, not a fund, trust, or holding company," and that index classification "doesn't define" the firm.

But the market isn't listening. It's pricing in forced selling, liquidity drain, and reputational damage,not Saylor's conviction.

Investor Signal

Index exclusion risk isn't speculation anymore, it's a scheduled event with a January 15 decision date.

The $9B forced outflow estimate represents structural selling that won't stop until positioning resets or MSCI reverses course.

Strategy's NAV discount signals the Digital Asset Treasury premium has evaporated.

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Fundstrat co-founder Tom Lee maintained his $150,000–$200,000 year-end Bitcoin target in a new Bloomberg profile this week, calling retail adoption and ETFs long-term tailwinds despite brutal near-term volatility.

Lee's extended thesis projects Bitcoin reaching $3 million by 2030, arguing that its $1.9 trillion market cap remains tiny compared to $120 trillion in equities, $140 trillion in fixed income, and $250 trillion in real estate globally.

But Lee also offered the clearest explanation yet for why Bitcoin collapsed from $125,000 in early October to $81,000 this week.

In a CNBC appearance Thursday, Lee said the October 10 crash crippled market makers who supply liquidity across exchanges, triggering an Auto-Deleveraging cascade that spread from one venue to others as stablecoin mispricing forced liquidations.

"This drip that's been taking place for the last few weeks in crypto reflects this market maker crippling," Lee explained, noting that the cleanup process typically takes eight weeks and that crypto is now six weeks into the flush.

Here's what that means:

Market makers absorbed massive losses on October 10.
They pulled liquidity.
Trading became thinner.
Volatility spiked.

And the slow bleed continued as forced sellers kept hitting bids.

Lee called crypto "a leading indicator for equities" and said the unwind is structural, not sentiment-driven, with the AI and crypto trades closely linked through overlapping investor bases.

But here's the turn:

Lee believes the worst is behind the market.
He said each prior crypto correction saw recoveries that were faster than the decline.
And he expects "spooled up energy" from patient buyers to drive a sharp rebound once forced sellers finish flushing out.

Lee highlighted surging stablecoin volumes on Ethereum, record blockchain platform revenues, and strong performance in crypto-related equities as evidence that on-chain fundamentals remain robust despite price action.

Investor Signal

Lee's $200K call isn't hype, it's conviction backed by a market-maker liquidation thesis that's now six weeks into an eight-week flush.

If Williams' rate-cut signal holds and liquidity returns, Lee's pattern suggests recovery speed will outpace the decline.

Watch for market-maker positioning to stabilize before assuming bottom formation.

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Fed's Williams just doubled December rate-cut odds from 35% to 70% in a single speech.

Bitcoin bounced $3,000 from overnight lows.

But the structural damage runs deeper than one Fed official can fix.

Strategy faces $9 billion in forced passive outflows if MSCI excludes it from major indices on January 15. The stock trades 3% above critical support, 68% below July peaks, with its NAV premium collapsed to pandemic lows.

Tom Lee holds his $200K target, calling the October crash a market-maker liquidation event now six weeks into an eight-week flush.

Bitcoin closed the week at $84,000 after touching $81,000, down 20% for November and on pace for its worst month since the 2022 crypto winter.