by Coinstrooper Crypto Articles
Quick Take
  • Global equity funds drew a record $266 billion in four weeks, per the Kobeissi Letter.
  • Bitcoin (BTC) 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.

What Happened

Global equity funds drew a record $266 billion in four weeks, per the Kobeissi Letter. Bitcoin (BTC) sat out the rush as Fed hike odds for December hit 84.4%.

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.

Even so, Asian stocks rebounding on Monday took their cue from Wall Street rather than setting the direction.

Market Context

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?

In contrast, emerging market Asia equity funds attracted $470 billion, per the same post. European equity funds lost $426 billion.

Consumer price index (CPI) 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.

Why It Matters

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?

Details

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 lagged the Nasdaq rebound on Friday. US spot Bitcoin exchange-traded funds (ETFs) saw $1.28 billion in net outflows from November 2 to 6, the analysis said.

A softer CPI reading would trim hike odds and weaken that read.

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