Wall Street giants sequentially open cryptocurrency ETFs—Is the market downturn cycle bottoming out?

Wall Street’s attitude shift often signals the precursor to large capital entering the market. Leading global asset management giant Vanguard Group recently announced policy adjustments allowing investors to trade crypto-related ETFs and mutual funds through its platform. Almost simultaneously, Bank of America also made its first asset allocation recommendation to wealth management clients, suggesting a crypto exposure of 1% to 4% in their asset mix. What does this shift imply?

Key Signals from Mainstream Financial Institutions

Vanguard’s move represents the official entry of crypto assets into the mainstream allocation framework for institutional investors. The company manages substantial pension funds and long-term investment portfolios, and its policy adjustment carries structural significance — this is not short-term speculation, but institutional recognition of the long-term value of crypto assets.

Bank of America’s initiative is equally significant. About 15,000 of its wealth advisors will be authorized to directly recommend crypto asset allocations to clients, covering four Bitcoin ETF products: BITB, FBTC, Grayscale Mini Trust, and IBIT. Compared to previous policies where advisors were prohibited from proactively recommending crypto products, this adjustment suggests the possibility of large-scale institutional capital inflows.

How Will the Market Respond to These Positive Signals?

The market reacted swiftly and strongly to the news. On December 2, Bitcoin surged over 6% intraday, breaking the $90,000 psychological barrier, and ultimately closed at a high of $92,328; Ethereum also rose over 7%, reclaiming the $3,000 mark, reaching $3,034.8.

However, market volatility remains. According to on-chain data platform Coinglass, within the past 24 hours on December 3, the total crypto market liquidation reached $376 million. Short positions were liquidated at $310 million, and long positions at $66.56 million. This reflects ongoing divergence among market participants regarding the future direction, with risk appetite showing instability.

The “Bear Market” Shadow Before the Rebound

It is worth recalling that Bitcoin has been in a sustained downtrend since October. On October 10, the market experienced a historic liquidation wave — over $19 billion in a single day, with Bitcoin dropping nearly 10% that day. The correction continued until November 21, during which Bitcoin touched a low of $80,537, a 36% decline from its all-time high.

The logic behind this decline is straightforward: during the previous rally, a large amount of speculative capital flooded in through leveraged contracts, crypto lending, and other high-risk methods, rather than long-term holdings. When profits were taken at high prices, the chain reaction of leveraged long liquidations triggered a vicious sell-off cycle. Multiple $1 billion liquidations in early October and November exemplify this process.

Policy Environment and Technical Support

In addition to the expectations of institutional entry, macro policy conditions are also improving. The Federal Reserve’s probability of further 25 basis point rate cuts in December has risen to 89.2%, favoring risk assets with a loose monetary environment. Meanwhile, the new administration’s relatively friendly stance toward cryptocurrencies further reduces policy uncertainty risks.

On the technical side, Bitcoin’s daily chart shows a rebound after gaining effective support at $86,000. The AO indicator continues to show bullish momentum accumulation, confirming the formation of a rebound cycle. If Bitcoin can sustain stability above $80,000, the market may gradually build a mid-term bottom through time and space.

Next Technical Targets

In the short term, $92,000 will be a key resistance level for Bitcoin. If this level is successfully broken, the next targets could be $94,000 and even the psychological barrier of $100,000. This depends not only on technical support but also on whether institutional capital continues to flow into the market as expected. The policy adjustments by Vanguard and Bank of America lay the foundation for this expectation, but ultimately, market volume will confirm it.