Bitcoin Faces Fresh Pressure From Fed Uncertainty as Kospi Tumbles 8%

Bitcoin and global stock markets came under renewed pressure after hotter-than-expected U.S. inflation data increased concerns that the Federal Reserve could raise interest rates this month. Expectations for an October hike briefly climbed to almost 50% following Wednesday’s report before retreating.

Bitcoin, the largest cryptocurrency by market capitalization, fell 1% from midnight UTC. During early Asian trading, BTC approached $80,000 before rebounding temporarily to around $81,500. The recovery lost momentum afterward, leaving Bitcoin near $81,000, according to CoinDesk data. The cryptocurrency was down more than 2% over the previous 24 hours.

Major altcoins suffered steeper declines, with Ethereum, XRP and Solana losing between 3.5% and 4%. PYTH stood out as the only token among the top 100 cryptocurrencies by market value to retain gains exceeding 7%.

The weakness also spread to traditional markets. Nasdaq futures dropped 1% at the time of writing, extending the technology-heavy index’s 2% decline on Wednesday. Meanwhile, South Korea’s KOSPI plunged 8%, triggering circuit breakers as the selloff intensified.

The latest U.S. inflation report showed that consumer prices increased 3.7% year over year in September, accelerating from 3.4% in August and exceeding economists’ projections. Core consumer prices, which exclude food and energy, rose 2.6%, compared with a 2.4% increase in the previous month.

The figures prompted traders to revise their expectations for the Federal Reserve’s next policy decision. On prediction platform Polymarket, the implied probability of an October rate increase briefly approached 50% before falling to roughly 30%. CME’s FedWatch tool showed a similar change, with the odds rising from around 22% to nearly 47% before declining to 26% at the time of writing.

Vikram Subburaj, CEO of India-based cryptocurrency exchange Giottus, said the latest inflation reading had revived concerns that borrowing costs could remain high for longer. With annual inflation reaching 3.7% in September, uncertainty about the Federal Reserve’s next move has increased.

Institutional demand for Bitcoin has also shown signs of weakness. Subburaj noted that U.S. spot Bitcoin exchange-traded funds recorded $150.5 million in net outflows on October 14, reversing the $175.7 million in inflows reported a day earlier.

Market-making firm STS Digital warned that uncertainty surrounding the Federal Reserve’s upcoming decision could hurt market liquidity and make investors more reluctant to take risks.

“With the next FOMC a coin flip, this uncertainty is damaging liquidity and dampening risk appetite across all asset classes,” the firm’s Anderson told CoinDesk in an email.

Despite the uncertainty, Anderson expects policymakers to keep interest rates unchanged this month. CME Fed funds futures reflected a similar outlook, indicating a greater than 70% probability of the Federal Reserve maintaining its current rate at the time of writing.

Anderson added that cryptocurrencies have become more vulnerable to macroeconomic developments despite recent optimism across digital asset markets. Higher energy costs, volatility in bond markets and concerns over artificial intelligence valuations are contributing to the deterioration in investor sentiment.