Analyst: Regulatory and institutional tailwinds drive crypto market rebound, but sentiment remains cautious

On December 3, CoinDesk analyst Shaurya Malwa stated that despite a rebound in the crypto market, market sentiment remains cautious. Earlier this week, Bitcoin’s previous sell-off, coupled with reduced weekend liquidity and spillover from macro market tensions, amplified price volatility. The broader market is still digesting concerns related to corporate balance sheets, including sharp pullbacks in ETFs associated with Strategy and the pending review of MSCI’s methodology, all of which have dampened risk appetite in recent trading. Tuesday’s rally was driven by several incremental catalysts. U.S. SEC Chairman Paul Atkins stated that the SEC plans to announce a proposed “innovation exemption” framework for digital asset companies, which the market viewed as a step toward regulatory clarity after months of stalled policymaking. In addition, Vanguard announced this week that it would allow trading of crypto asset ETFs and mutual funds on its platform, which boosted market sentiment after prolonged capital outflows. However, structurally, this rebound appears to be primarily a relief response rather than a trend reversal. Market depth remains uneven, and several major tokens are recovering from multi-week lows. The next test will be whether spot demand can sustain this rebound once the derivatives market recovers from the liquidation cycle.