Bitcoin Falls Below $81,000 as Fed Rate Uncertainty Grows

Following Wednesday's inflation report, bets on a Fed rate hike in October briefly surged to 50%, but have since retreated.

$81,499.86 Bitcoin Bitcoin is under pressure as Wednesday's U.S. inflation data revived concerns about the Federal Reserve raising interest rates this month.

The largest cryptocurrency by market capitalization was trading just below $81,000 early Thursday, down nearly 1 percent since midnight UTC. Prices were near $80,000 on Wednesday before a brief pullback to around $81,500, but CoinDesk data showed that the gains were largely reversed during the Asian session. Prices have fallen by more than 2% in the last 24 hours.

Tokens such as Ether Ether $2365.03, XRP (XRP), Solana (SOL) fell 3.5% to 4%. PYTH is the only top 100 cryptocurrency still up more than 7%.

Data released on Wednesday showed that consumer prices rose 3.7 percent in the 12 months to September, up from 3.4 percent in August and above economists' expectations. Core CPI, excluding food and energy, rose 2.6 percent, accelerating from 2.4 percent in the previous month.

Markets quickly reassessed the chances of the Fed moving. On the forecasting platform Polymarket, the probability of an interest rate hike in October after the CPI release briefly rose to 50% before falling to around 30%. CME's FedWatch tool showed a similar pattern: the odds rose from roughly 22 percent initially to roughly 47 percent, then fell to 26 percent after writing.

Vikram Subburaj, CEO of India-based exchange Giottus, said: “Stronger US inflation data has raised concerns that interest rates will remain higher for longer. Inflation rose to 3.7 percent in September, raising uncertainty about the Fed's next move to reserve institutional demand is also fragile. US Bitcoin Cash ETFs recorded outflows of $150.5 million on Oct. 14, reversing inflows of $175.7 million the previous day.

Market maker STS Digital said the uncertainty could affect liquidity across markets.

"With the next FOMC, this uncertainty will hurt liquidity and reduce risk exposure across all asset classes," the firm's Anderson told CoinDesk in an email.

Still, Anderson thinks the Fed will keep interest rates on hold this month, which corresponds to a more than 70 percent chance of a decision as it stands.

"Despite recent optimism in digital assets, tokens now look increasingly sensitive to macro factors, with energy shocks, fixed income volatility and AI valuations weighing on sentiment," he added.

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