Fed rate expectations drive Bitcoin drop below $73,000, Coinbase says
US spot Bitcoin ETFs saw $1.44bn in net outflows over five trading days, while stablecoin supply contracted by a record $11.5bn over the past month.
Key takeaways
- 1Coinbase Institutional cited Fed rate expectations as the main driver of Bitcoin falling below $73,000.
- 2Markets are fully pricing in a 25 bps Fed rate hike in December and 64 bps over the next 12 months.
- 3US spot Bitcoin ETFs logged $1.44bn in net outflows over five trading days up to 11 November.
- 4Spot ETF holders currently sit on roughly $12.7bn in aggregate unrealised losses.
- 5Total stablecoin supply contracted by a record $11.5bn over the past 30 days.
Coinbase Institutional said shifting Federal Reserve interest rate expectations were the primary driver of Bitcoin's recent fall below $73,000, rather than a security exploit on competitor exchange Binance.
In its weekly market report, the institutional unit pointed to October nonfarm payrolls and consumer price index data that both exceeded economic forecasts. Financial markets have now fully priced in a 25 basis point rate increase by the US central bank in December, along with 64 basis points of total rate hikes over the next 12 months.
Institutional investor flows turned sharply negative alongside the macroeconomic shifts. US spot Bitcoin exchange-traded funds recorded $1.44bn in net capital outflows across the five trading days leading up to 11 November. Aggregate unrealised losses for spot ETF holders have reached approximately $12.7bn.
Liquidity across the digital asset market has also tightened. Total stablecoin supply contracted by a record $11.5bn over the past 30 days, reflecting reduced capital deployment across crypto trading desks.
Coinbase Institutional said that a sustained period below the $73,000 mark significantly increases the likelihood of a further price move toward the $66,000 to $68,000 support zone.
Reported and edited by the YourKhabri desk under our editorial policy. Nothing here is investment advice.