Concerns About Fed Rate Hike Lowers Bitcoin to $73,500
The price of one bitcoin was roughly $73,500, down about 1% from the previous day and nearly $32,000 from a year ago. This shift is in response to statistics showing inflation is stronger than expected, which has rekindled worries about a possible rise in interest rates set by the Federal Reserve. October saw a 0.4% increase in the U.S. consumer price index, which was higher than the 0.3% predicted by economists. Exceeding predictions of 0.2%, the core consumer price index, which does not include food and energy, rose by 0.3%. The price of bitcoin remained relatively stable near $74,300 just before the announcement at 8:30 a.m. Shortly after the print, it fell to around $73,400, briefly falling below Monday’s overnight low of $73,477, before settling back into the high-$73,000s. Compared to the previous month, food costs rose 0.5%, electricity prices by 0.7%, and petrol prices by 1.0%. An increase of 0.3% was seen in housing costs.
There will be no yearly inflation rate included in the report. Since a similar data could not be gathered due to the government shutdown in October 2025, the Bureau of Labour Statistics does not have them. Before the announcement, Bank of America predicted that the headline figure would be around 3.8% and the core measure about 2.7%. The initiative was taken by bond traders. Treasury rates between two and five years rose by at least 10 basis points after the print, and traders were already bracing for a half-point raise at the Federal Reserve’s meeting on December 9. This was the plan that Federal Reserve Governor Christopher Waller presented a few hours ago. He said he is “leaning toward” a December increase and would back “more robust action” if inflation ran hotter than expected. “In that case, I believe a 50 basis point hike in the policy rate should be considered at the December meeting,” Waller said. “Hiking only 25 basis points would put our credibility at risk, a risk I am not eager to take.”
A quarter-point adjustment was the most widely anticipated market move before to the data announcement. Following Friday’s strong jobs data, the price of bitcoin has been capped due to the calculation that higher rates raise the expense of retaining an asset that gives no dividend. Even before the sun came up, Bitcoin was showing signs of weakness. Despite a bounce in Asian markets, it fell almost 1.4% from midnight before the report was released. Notable increases of 4.39% and 2.87% were recorded by the Kospi in South Korea and the Nikkei 225 in Japan, respectively. At the same time, after President Trump said that additional attacks on Iran are “highly unlikely,” oil prices kept falling. Prior to the upcoming release, stock futures showed a range of performances. The S&P 500 had its best performance since April 8 after Monday’s gain, which caused Dow futures to rise 156 points, or 0.3%. In contrast, Nasdaq-100 futures fell 0.4%. The commodity market also saw a fall. Gold fell below $4,100/oz, a loss of little more than 1%, and West Texas Intermediate crude oil hit a new low of over $84/bbl, its lowest level since late August.
The reduction has persisted despite the lack of demand for funds. On Monday, U.S. spot bitcoin ETFs lost $201 million, with the biggest loss coming from BlackRock’s iShares Bitcoin Trust, which has been selling shares for seven days in a row, losing $213.2 million. The trend continues as BlackRock announces a record-high demand for the conversion of coins into IBIT in kind. Since early October, when it reached a high of almost $87,000, the price of bitcoin has fallen due to a combination of factors, including a retreat from ETF investors and worries about artificial intelligence on Wall Street. Following Monday’s loss of $184.6 million in U.S. spot ether ETFs, Ethereum fell about 1.4% to about $2,100 overnight. On the list of those to keep an eye on, analysts put 73,000. Opening the door to $70,000 might be as simple as a daily closing below it, while regaining $80,000 would indicate hotter demand. On Friday, we will get producer price data, and on November 18, we will get the minutes from the Federal Reserve’s October meeting. Both will be useful in deciding whether traders will cut their half-point raise positions or keep them.
