CoinDesk
Bitcoin traded just below $81,000 early Thursday, down more than 2% over 24 hours after hotter-than-expected U.S. inflation revived concern that the Federal Reserve could raise rates in October. The largest cryptocurrency neared $80,000 on Wednesday, rebounded to about $81,500, then gave back much of that move during the Asian session.
Why it matters
Consumer prices rose 3.7% in the 12 months through September, up from 3.4% in August and above economists’ expectations. Core CPI accelerated to 2.6% from 2.4%. The report briefly pushed October rate-hike odds close to 50%. Polymarket’s estimate later eased to about 30%, while CME FedWatch odds fell to 26% after first rising from roughly 22% to almost 47%.
The shifting rate outlook adds to pressure from fragile institutional demand. U.S. spot Bitcoin ETFs saw $150.5 million in outflows on Oct. 14, reversing the previous day’s $175.7 million inflow. STS Digital said uncertainty around the Fed is weighing on liquidity and risk appetite across asset classes.
Market impact
The pullback shows Bitcoin’s sensitivity to macroeconomic repricing as investors weigh inflation, interest rates and demand for risk assets. Ether and other digital assets are also facing a market increasingly responsive to broader economic factors, according to Giottus CEO Vikram Subburaj.
A Fed hold remains the more widely priced outcome: CME Fed funds futures indicated more than 70% odds of no rate change this month. But the inflation report has made the policy outlook less settled, while ETF flows show institutional demand can shift quickly. Traders are watching both rate expectations and whether spot Bitcoin ETF flows stabilize.
Frequently asked questions
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What did the latest U.S. inflation report show?
Consumer prices rose 3.7% in the 12 months through September, up from 3.4% in August. Core CPI increased to 2.6% from 2.4%.
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How did October rate-hike expectations change after the report?
Hike odds briefly approached 50% after the CPI release, then retreated to about 30% on Polymarket and 26% on CME FedWatch.
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What happened to U.S. spot Bitcoin ETF flows?
Spot Bitcoin ETFs recorded $150.5 million in outflows on Oct. 14, reversing the previous day's $175.7 million inflow.
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What was the market's favored Fed outcome?
CME Fed funds futures indicated more than 70% odds of no rate change this month, despite renewed concern about an October hike.
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Why are macro conditions weighing on Bitcoin?
Higher inflation has renewed uncertainty about interest rates, while fragile ETF demand and Fed uncertainty are weighing on liquidity and risk appetite.
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