CoinShares: Bitcoin's Resilience Emerges Amid Ongoing Fed Rate Hike Risks

CoinShares analysis indicates that the ongoing weakness in the U.S. housing market provides space for the Federal Reserve to pause interest rate hikes, but inflationary pressures remain a key constraint on monetary policy. The market expects the Fed to keep interest rates unchanged at the meeting on October 28, but recent hotter CPI and PPI data still pose risks for future rate hikes. Analysts believe that if the Fed unexpectedly raises rates in October, it could trigger a larger shock due to exceeding market expectations. Bitcoin has shown relative resilience this week amid volatility in risk assets, supported by a rebound in spot demand, improved stock market sentiment, and short covering. However, the future trajectory of the cryptocurrency market will still be primarily influenced by interest rate expectations and changes in liquidity, as the policy buffer from the weak housing market is not sufficient to offset inflation risks.

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