Bitcoin December Fed Hike Odds Reach 84% as Equity Funds Draw $266B

On November 10, Bitcoin traded close to $74,200 as the likelihood of a December Federal Reserve rate hike climbed to 84.4%. Meanwhile, global equity funds attracted $266 billion across a four-week span. According to CoinDesk, BTC experienced a 1.4% decline since midnight UTC.

Cryptocurrency traders are paying close attention to both equity-fund inflows and shifting rate expectations. The 84.4% probability represents current market pricing rather than an official Fed ruling, given that central bank officials kept rates unchanged at their October gathering.

Bitcoin trails a record $266 billion equity-fund rush

Data from the Kobeissi Letter, highlighted by BeInCrypto, shows that global equity funds pulled in a record $266 billion over four weeks. Momentum accelerated previously during the week, drawing $89 billion worldwide, which included a $32 billion share for U.S. equity funds alone.

The Kobeissi Letter noted that U.S. equity funds have accumulated $2.1 trillion since 2020, with $1.5 trillion of that total entering since the beginning of 2024. Over the same broader timeframe, emerging-market Asia equity funds gained $470 billion, whereas European equity funds suffered $426 billion in departures.

Additionally, Bitcoin lagged behind the Nasdaq’s Friday recovery. While these metrics highlight a divergence in capital flows, they do not prove that buying equities directly pushed Bitcoin downward.

Bitcoin rate-hike odds point to a possible December shift

According to the CME FedWatch tool, the probability of a 25-basis-point rate increase on December 9 sat at 84.4%, with zero expectation for a rate reduction. Market participants were actively pricing in a quarter-point bump that would elevate the target range to 4.00%-4.25%.

Federal Reserve Governor Christopher Waller expressed support for a higher borrowing cost even if inflation slowed down. He noted that an unexpectedly hot inflation print could even justify a half-point adjustment.

During their October 28 meeting, the Fed voted 10 to 2 to maintain the target range at 3.75%-4%. Lisa Cook and Beth Hammack cast dissenting votes, advocating for a quarter-point hike during that session.

Bitcoin holders face ETF outflows and higher-rate pressure

Between November 2 and 6, U.S. spot Bitcoin exchange-traded funds recorded $1.28 billion in net outflows. Because Bitcoin yields no income, elevated interest rates can make U.S. Treasuries a more appealing alternative, potentially introducing added friction if rate projections continue to climb.

Because the 84.4% probability is merely a market prediction, upcoming inflation figures could easily alter it. Long-term investors are likewise monitoring ETF withdrawals alongside Bitcoin’s underperformance relative to traditional equity indexes.

October CPI and Treasury auction are the next signals

The U.S. Consumer Price Index report for October was scheduled for release on Tuesday, November 10. Projections estimated headline inflation would grow 0.3% month over month, while core inflation—excluding food and energy—was anticipated to rise 0.2%.

Year-over-year comparisons for October were unavailable because a government shutdown in the prior year prevented data collection. September’s annual headline and core inflation figures stood at 3.7% and 2.6%, respectively.

Furthermore, a $42 billion auction for 10-year Treasury notes was slated for later in the week. A softer-than-expected CPI print could dampen expectations for a December hike, whereas a hotter outcome might force traders to re-evaluate both the odds and the subsequent pressure on Bitcoin.

?FAQ

01When is the Fed rate decision markets are pricing in?

The expected decision date is December 9, 2026. Traders were pricing a quarter-point increase, but the Fed has not made that decision.

02What did Governor Christopher Waller say about rates?

Waller backed a higher rate even if inflation cooled. He said a hotter-than-expected inflation reading could warrant a half-point increase.

03How much did U.S. spot Bitcoin ETFs lose from November 2 to 6?

U.S. spot Bitcoin ETFs saw $1.28 billion in net outflows during that period. Higher rates can make Treasury returns more attractive than Bitcoin.

04When was the October U.S. CPI report due?

The report was due Tuesday, November 10. Forecasts called for headline inflation to rise 0.3% month over month and core prices to increase 0.2%.

05Why can higher interest rates weigh on Bitcoin?

Higher rates can make Treasury returns more attractive than a non-yielding asset such as Bitcoin. That can affect how investors allocate capital, but it does not determine Bitcoin’s price on its own.

This article is for information only and is not financial advice.