Bitcoin Sits Out Equity Fund Rush as Fed Hike Odds Reach 84%
Global equity funds drew a record $266 billion in four weeks, per the Kobeissi Letter. Bitcoin sat out the rush as Fed hike odds for December hit 84.4%.That rush now meets a Fed that markets expect to tighten. Higher rates raise Treasury returns against non-yielding assets like Bitcoin, leaving BTC holders facing a second headwind.Who Is Capturing the Equity Fund Flows?The Kobeissi Letter, says US equity funds have taken in $2.1 trillion since 2020. Of that, $1.5 trillion arrived since the start of 2024.In contrast, emerging market Asia equity funds attracted $470 billion, per the same post. European equity funds lost $426 billion.Even so, on Monday took their cue from Wall Street rather than setting the direction.Global equity funds gained $89 billion last week, with US funds supplying $32 billion of it. As a result, four-week inflows reached a record $266 billion, the post said.What Do 84% Fed Hike Odds Mean for Bitcoin?The CME Group’s FedWatch tool converts futures on the Fed’s benchmark rate into probabilities. It shows an 84.4% chance of a quarter-point hike on December 9, with 0% assigned to a cut.However, the Fed held rates at 3.75% to 4% on October 28 in a 10 to 2 vote. Officials Lisa Cook and Beth Hammack dissented in favor of a quarter-point hike at that meeting.Meanwhile, Bitcoin on Friday. US spot Bitcoin exchange-traded funds (ETFs) saw $1.28 billion in net outflows from November 2 to 6, the analysis said.Consumer price index data lands later Tuesday and will test those rate expectations. A $42 billion 10-year note auction follows this week’s Treasury sales, which opened with soft demand.Still, positioning this concentrated may leave US equities exposed to a firmer Fed than priced in. It may also leave crypto exposed if capital keeps skipping it.A softer CPI reading would trim hike odds and weaken that read.