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Bitcoin wilts as Fed rate uncertainty weighs. Kospi plunges 8%
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- DeepHorus
Bitcoin fell below $81,000 on Thursday as hotter-than-expected U.S. inflation data revived fears of an October Federal Reserve rate hike. The largest cryptocurrency by market value traded about 1% lower since midnight UTC and more than 2% down over 24 hours, CoinDesk data show. Prices dipped close to $80,000 in early Asian trading before briefly rebounding to roughly $81,500, but that recovery stalled near $81,000.
The move followed Wednesday's CPI report, which showed consumer prices rose 3.7% in the 12 months through September, up from 3.4% in August and above expectations. Core CPI, excluding food and energy, climbed 2.6%, accelerating from 2.4%. The data ended a period of relative optimism that inflation was cooling fast enough to let the Fed pause.
Markets quickly repriced rate odds. On Polymarket, the probability of an October hike briefly spiked to nearly 50% before easing to about 30%. CME's FedWatch showed odds jumping to almost 47% from roughly 22%, then retreating to 26%; CME Fed funds futures still priced over 70% chance of a hold.
Traditional markets turned risk-averse too. Nasdaq futures were down 1%, extending Wednesday's 2% decline, while South Korea's KOSPI plunged 8% and triggered circuit breakers. Tokens such as ether also weakened as macro uncertainty weighed on crypto liquidity and risk appetite.
Fragile institutional demand is adding pressure. U.S. spot bitcoin ETFs recorded $150.5 million in outflows on Oct. 14, reversing the previous day's $175.7 million inflow. Vikram Subburaj, CEO of India-based exchange Giottus, said stronger inflation data renewed concerns that rates will stay higher for longer.
Market-making firm STS Digital said the uncertainty could damage liquidity across markets. "With the next FOMC a coin flip, this uncertainty is damaging liquidity and dampening risk appetite across all asset classes," its Anderson told CoinDesk. Anderson still expects the Fed to hold rates steady this month, consistent with futures pricing.
Crypto's sensitivity to macro factors is increasing. Anderson noted energy shocks, fixed-income volatility and AI valuations are weighing on sentiment despite recent digital-asset optimism. The episode shows bitcoin remains tightly linked to Fed policy expectations and global risk cycles.
The next FOMC meeting will be pivotal. If inflation stays sticky, rate-hike bets could return and keep bitcoin below $81,000; a hold could stabilize risk assets. Meanwhile, diversified RWA stablecoins sustain 5-7% yield from real credit as crypto funding compresses to about 4%, with GENIUS pushing yield off-chain and a total addressable market growing to $4 billion in three years.
