Bitcoin Misses Record Equity Haul as Traders Price 84% Odds of Rate Hike

Investors are piling into stocks at a record clip — and Bitcoin is watching from the sideline. Global equity funds pulled in $266 billion over the past four weeks, the biggest four-week haul on record, according to The Kobeissi Letter. Meanwhile, futures markets put the odds of a Fed rate hike on December 9 at 84.4%, with a cut priced at zero.

Last week alone, global equity funds added $89 billion, with US funds accounting for $32 billion of that. The Kobeissi Letter puts cumulative US equity fund inflows at $2.1 trillion since 2020, and $1.5 trillion of that has landed since the start of 2024. Emerging market Asia equity funds drew $470 billion over the same stretch, while European equity funds bled $426 billion.

The Fed isn't helping crypto's case. Officials held the benchmark rate at 3.75% to 4% on October 28 in a 10-2 vote, with Lisa Cook and Beth Hammack dissenting in favor of a quarter-point hike right then. CME Group's FedWatch tool, which converts rate futures into probabilities, now assigns that hike an 84.4% chance for December 9. Higher Treasury yields make non-yielding assets like Bitcoin a harder sell.

The price action shows it. Bitcoin failed to follow the Nasdaq's Friday rebound, and US spot Bitcoin ETFs saw $1.28 billion in net outflows from November 2 to 6, per the analysis.

Two events this week will test whether those hike bets hold. Consumer price index data lands Tuesday, and a $42 billion 10-year note auction follows a run of Treasury sales that opened with soft demand. A cooler inflation print would pull hike odds down; positioning this crowded in US equities leaves stocks — and crypto — exposed if the Fed turns out firmer than traders have priced.