Asia Morning Briefing – 16/10/2025: QCP Says Liquidity, Not Fed Cuts, Is Driving Markets
QCP Capital’s latest note highlights a shift in global market dynamics: liquidity is now the dominant force, outweighing Fed rate decisions. Central bank balance sheets, cross-border capital flows, and institutional hedging are influencing market risk more than the Fed’s next 25 basis points.
“Central bank purchases, de-dollarization flows, and institutional portfolio hedging have become the main drivers of gold, extending its relevance beyond a simple inflation hedge,” QCP noted. Over the past weekend, the Bitcoin–gold correlation rose above 0.85, reflecting synchronized flows between these two asset classes.
Prediction markets indicate a gradual Fed easing cycle, favoring gold and digital assets over high-beta risk. On Kalshi, traders currently assign a 76% chance of three rate cuts in 2025, totaling 75 bps, consistent with JP Morgan’s “mid-cycle, non-recessionary” scenario. Fed Governor Michelle Bowman reinforced this outlook, calling for two additional cuts by year-end.
Bitcoin is trading within this liquidity-driven framework. Kalshi markets price a 51% probability of BTC reaching $130,000 this year, 33% for $140,000, and 21% for $150,000, with even odds of hitting $150,000 by mid-2026. The market is positioned for a slow, liquidity-fueled rally, rather than a rapid speculative surge. Glassnode data shows concentrated call options at $130,000, suggesting potential short-term volatility while anchoring resistance at that level.
Macro and on-chain indicators point toward a steady, liquidity-supported advance, not an adrenaline-driven bull market, though unexpected events could still influence short-term moves.
Market Snapshot
- BTC: Trading above $110,500, down 2%, pressured by U.S.–China trade tensions. Breaching $110,000 support could open the path to $96,500–$100,000.
- ETH: Around $3,900, down 4%, as investors trim exposure amid macro uncertainty. Some expect Ethereum to eventually track gold’s performance.
- Gold: Near $4,141.81/oz, supported by safe-haven demand amid trade tensions and expectations for Fed rate cuts.
- Nikkei 225: Up 0.95%, following Wall Street gains driven by strong bank earnings.
