According to Woofun AI, the core game of this week's Fed interest rate meeting was not directly aimed at Bitcoin, but rather set the tone for the December policy through a post-meeting statement. The Federal Reserve raised interest rates by 25 basis points to 3.75% — 4.00% on September 16, the first time since 2023; the current meeting issued statements from October 27 to 28 and 28, presided over by Chairman Kevin Walsh. No new economic forecasts will be released at the October meeting. According to market pricing, the probability of keeping interest rates unchanged in October is about 91%, but the probability of raising interest rates by 25 basis points in December has risen to around 68%, with the main focus being between 67.5% and 68.9%.
This pricing structure suggests that the market is not over of tight trading, but rather expects the Federal Reserve to adopt a “hawkish pause” strategy in exchange for time in exchange for an observation window while retaining the option of increasing in December. Inflation data shows no signs of loosening. The University of Michigan's October survey showed that long-term inflation expectations rose to 3.5% from 3.4% in September, and from 4.6% to 4.7% for the next year, both of which are the highest since May. Survey leader Joanne Hsu attributed the rise to the erosion of household finances by high prices: 56% of respondents said high prices dragged down personal finances, rising for the fourth month in a row; 69% of consumers expected interest rates to rise in the next year, the highest since April 2023. As a result, investors are afraid to regard the fall in inflation as a fait accompli, and the interest rate environment facing Bitcoin is still tight.
According to data compiled by Woofun AI, the price of Bitcoin has reflected this expectation ahead of time. Recently, it has repeatedly fallen below $80,000 and the support is unstable. ETF funds showed a fluctuating trend. Net inflows of $526.7 million, $232 million, and $524.8 million were respectively on the five trading days from October 19 to 23, followed by net outflows of $635.6 million and $137.9 million. The net inflow of US$301.2 million was barely maintained throughout the week, and a net outflow of US$314 million for the entire month of October. Institutional behavior is fragmented, and Strategy (MSTR.US) suspended Bitcoin purchases last week. This was the first time since mid-September that it remained on hold, and no additional shares were sold through ATMs during the same period. Its holdings are 848,517 bitcoins, with an average price of $75,446, and a total cost of about US$640.2 billion, accounting for more than 4% of the total Bitcoin supply. However, it took more than a month to repurchase STRC Preferred Stock ($193.1 million and $192.4 million in the previous two weeks, respectively). Based on 12% annual interest on that preferred stock, this move could save about $24.8 million in dividends each year; the total amount authorized to repurchase was $3 billion, leaving $956.8 million. Its dollar cash fell from $447.3 million a week ago to $242.4 million, down 45.8% from week to week ($640.5 million two weeks ago), and another $4.83 billion in dollar reserves remained unused. The capital was mainly used to buy back preferred stocks rather than to sweep BTC. In contrast, fourth-ranked Strive (ASST.US) took the opposite approach and bought 6,182 bitcoins last week (about $511 million at the time price), rising its position to 43,000, which is only about 1,000 units short of Metaplanet's 44,000. However, the third-place Twenty One (XXI.US) holds 43,514 positions, which is 514 different from Strive, and the ranking of this round of holdings increase has not changed. The company's cash was approximately US$504.4 million, and the purchase used close to its full cash balance; its SATS preferred share financing plan was capped at $1 billion, with an annual interest rate of 15%. It had just raised 7 million shares and about US$630 million on October 20, and CEO Matt Cole said the goal was to reach second place by the end of the year. A more direct variable comes from index rules: MSCI finalized the processing rules for “non-operating companies” on October 15, published the list on November 11, and came into effect at the close of trading on November 30. If MSTR is removed, its ability to buy coins with additional stock issuance will be directly affected.
Another underestimated variable is Anthropic's IPO. According to the Wall Street Journal, its IPO valuation range is 1.5 trillion to 2 trillion US dollars, and the approximately $1.5 trillion discussed on Investor Day is lower than the previous forecast of about 2 trillion US dollars; the company plans to raise more than 100 billion US dollars, code ANT, and is expected to be listed in mid-November. The agency pointed out that investors may sell large technology stocks to free up capital to participate in the Anthropic IPO, which will put pressure on other technology stocks and repeat the liquidity squeeze effect when SpaceX (SPCX.US) went public at a valuation of about $1.77 trillion in June of this year. The crypto market also faces the risk of the IPO wave diverting liquidity. If the AI Big Mac listing absorbs risk appetite, Bitcoin will not only have to deal with the hawkish rhetoric of the Federal Reserve at the $80,000 mark, but also face competition from capital migration from highly volatile assets to IPOs. If the interest rate meeting keeps interest rates unchanged but the wording is hawkish, the probability that Bitcoin will fluctuate in the $78,000-$8.3 million range will soar. Liquidity in US stocks weakens in the fourth quarter of every year. Without significant favorable drivers, the crypto market needs to find its own support before it can reach the next peak.