Fed hike odds for December have climbed to 84%, according to CME Group’s FedWatch tool. US spot Bitcoin (BTC) exchange-traded funds (ETFs) shed $1.28 billion last week.
FedWatch derives its odds from fed funds futures. Those contracts give a hold just 15.6%, against 84.4% for a hike to 4.00% to 4.25%. The outflows were the largest weekly total since late June, data tracker SoSoValue reports.
Why Are Fed Hike Odds Rising While Stocks Rebound?
The Federal Reserve held rates at 3.75% to 4.00% on October 28, though two officials dissented for a hike.
The October jobs report then showed 165,000 new positions against forecasts of 65,000. The unemployment rate fell to 4.1%.
Hike odds rose to roughly 77% after the data.
Equities rebounded Monday after a tech sell-off, with the S&P 500 gaining 2.35%. The VIX, a gauge of expected stock volatility, fell 22%. However, the 10-year Treasury yield held near 4.9%.
Oil also fell on a reported US-Iran Hormuz deal, which typically eases inflation pressure. Even so, hike odds climbed further to 84% on Tuesday.
Can Bitcoin Demand Recover if the Fed Hikes?
A higher policy rate raises the opportunity cost of holding Bitcoin, which pays no yield. Meanwhile, ETF flows suggest institutions are already weighing that trade-off.
Those outflows pushed 2026 net flows to about negative $914 million, SoSoValue data show.
The two-year Treasury yield sits near 4.5%, above the top of the Fed’s current range. Futures also price about 50 basis points of hikes through December 2027, according to CME FedWatch. Futures assign no probability to a cut.
Chicago Fed President Austan Goolsbee has said officials missed on inflation. Fed Governor Christopher Waller speaks Tuesday, giving traders another read on December.
The October Consumer Price Index (CPI) arrives Tuesday at 8:30 a.m. Eastern Time. It is one of several key US data releases this week.
A hot print could harden December pricing. However, a soft one could pull odds well below 50%, which would weaken this bearish read.
A December hike would lift the policy rate to 4.00% to 4.25%. Bitcoin would still compete with Treasury yields near 4.9% for capital.
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