Markets tumble as doubts grow over December rate cut

Risk assets have shown a sell-off, driven by uncertainty surrounding a potential December interest rate cut. Bitcoin (BTC) fell below $95,000, marking a 1.87% decrease, while US equities also faced losses with the Nasdaq and S&P 500 down by 1.74% and 1.37% respectively. Fed officials have expressed skepticism about future rate cuts, largely due to a lack of new data correlating to jobs or inflation stemming from a government shutdown. This sentiment is reflected in the CME FedWatch Tool, which dropped the probability of a 25 basis point cut to 51%, down from 95% a month ago. Bitcoin ETF flows experienced their second-worst day ever, with approximately $870 million in outflows, marking three consecutive weeks of negative flows, previously seen during early 2025. Notably, Grayscale, a major player in the ETF space, reported a 20% decline in revenue for the first nine months, despite Bitcoin’s 80% price increase year-over-year. The overall performance across crypto indices was negative, highlighting broad risk-off market sentiment.

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