According to Woofun AI, the core battle at this week's Federal Reserve policy meeting is not aimed directly at Bitcoin, but rather uses the post-meeting statement to set the tone for December policy.
The Fed already raised rates by 25 basis points on September 16 to 3.75%–4.00%, its first hike since 2023; this meeting runs from October 27 to 28, with a statement released on the 28th, chaired by Kevin Warsh, and no new economic projections are published at the October meeting.
Market pricing shows the probability of holding rates steady in October is about 91%, but the probability of a 25 basis point hike in December has climbed to around 68%, with major estimates concentrated between 67.5% and 68.9%.
This pricing structure indicates the market is not trading on the end of tightening, but rather expects the Fed to adopt a "hawkish pause" strategy, buying an observation window with time while keeping the option of a December increase.
Inflation data show no signs of loosening. The University of Michigan's October survey showed long-term inflation expectations rose to 3.5% from 3.4% in September, while one-year expectations rose to 4.7% from 4.6%, both the highest since May.
Survey director Joanne Hsu attributed the rise to high prices eroding household finances: 56% of respondents said high prices are weighing on their personal financial situation, the fourth consecutive monthly increase; 69% of consumers expect interest rates to move higher over the next year, the highest since April 2023.
Investors therefore dare not treat falling inflation as a done deal, and Bitcoin still faces a relatively tight rate environment.
Data compiled by Woofun AI shows Bitcoin's price has already priced in this expectation in advance, repeatedly falling below $80,000 recently with unstable support.
ETF flows have been swinging. Over the five trading days from October 19 to 23, net inflows were $526.7 million, $23.2 million, and $524.8 million respectively, followed by net outflows of $635.6 million and $137.9 million on the next two days, leaving the week barely positive at $301.2 million net inflow, while the full month of October saw $314 million in net outflows.
Institutional behavior has diverged. Strategy (MSTR.US) paused Bitcoin purchases last week, its first standstill since mid-September, and did not sell shares through its ATM program during the same period.
Its holdings stand at 848,517 Bitcoins, with an average price of $75,446 and a total cost of about $64.02 billion, representing more than 4% of Bitcoin's total supply.
But during the week it spent $204.9 million repurchasing STRC preferred shares, its largest such buyback in over a month (the prior two weeks were $193.1 million and $192.4 million); based on the preferred shares' 12% annual yield, this move saves about $24.8 million in dividends per year; the total repurchase authorization is $3 billion, with $956.8 million remaining.
Its dollar cash fell to $242.4 million from $447.3 million a week earlier, a 45.8% week-over-week decline (two weeks earlier it was $640.5 million), with another $4.83 billion in dollar reserves unused, as funds were mainly used to repurchase preferred shares rather than scoop up BTC.
In contrast, fourth-ranked Strive (ASST.US) took the opposite approach, buying 6,182 Bitcoins last week (about $511 million at then-prices), lifting its holdings to 43,000 coins, just about 1,000 coins short of Metaplanet's 44,000.
But third-ranked Twenty One (XXI.US) holds 43,514 coins, leaving Strive 514 coins behind, and this round of accumulation has not yet changed the ranking.
The company has about $504.4 million in cash, and this purchase used nearly its entire cash balance; its SATS preferred stock financing plan has a ceiling of $1 billion with a 15% annual yield, and on October 20 it just completed a fundraising of 7 million shares worth about $630 million, with CEO Matt Cole saying the goal is to reach second place by year-end.
A more direct variable comes from index rules: MSCI finalized its treatment rules for "non-operating companies" on October 15, will publish the list on November 11, and they take effect at the close on November 30. If MSTR is removed, its ability to fund Bitcoin purchases by issuing shares will be directly affected.
Another underappreciated variable is Anthropic's IPO. According to The Wall Street Journal, its IPO valuation range is $1.5 trillion to $2 trillion, with the roughly $1.5 trillion discussed on investor day below the previously expected roughly $2 trillion; the company plans to raise more than $100 billion under the ticker ANT, with a listing expected in mid-November.
Institutions note that investors may sell large technology stocks to free up funds to participate in the Anthropic IPO, which would pressure other tech shares and replay the liquidity squeeze seen when SpaceX (SPCX.US) listed in June at a valuation of about $1.77 trillion.
The crypto market likewise faces the risk of an IPO wave diverting liquidity. If an AI giant's listing siphons off risk appetite, Bitcoin at the $80,000 mark must not only contend with hawkish Fed language but also face competition as capital migrates from high-volatility assets into new listings.
If the policy meeting leaves rates unchanged but with hawkish wording, the probability of Bitcoin oscillating in the $78,000 to $83,000 range will surge.
U.S. equity liquidity weakens every fourth quarter, and without a major positive catalyst, the crypto market will need to find its own support point before it can usher in the next peak.
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