Key Takeaways
- • CoinShares reported $434 million in outflows from global digital asset investment products during the week through October 16, attributing the withdrawals to shifting Federal Reserve rate expectations after hot U.S. inflation and retail sales data.
- • U.S. September CPI rose 3.7% annually, above the 3.6% forecast, with headline consumer prices up 0.6% monthly and gasoline prices climbing 9.1% during the month, according to the Bureau of Labor Statistics data cited by CoinShares.
- • September retail and food services sales rose 0.8% to $745 billion, versus expectations of about 0.3%, but excluding gasoline sales growth slowed to 0.2%.
- • Polymarket assigned roughly a 75% probability to an unchanged Federal Reserve rate in October and 25% to a quarter-point hike as of October 15.
- • CoinShares described Bitcoin's outlook as difficult but characterized the market as a "data-driven range rather than a trend," with Bitcoin trading near $81,500 to $81,900 during the CPI and PPI sessions.
Summary
Global digital asset investment products recorded $434 million in outflows during the week through October 16, according to CoinShares, as higher U.S. inflation and stronger consumer spending raised expectations of further Federal Reserve tightening. The asset manager linked the withdrawals to changing interest rate expectations following September's consumer price and retail sales reports.
The Bureau of Labor Statistics data released October 14 showed consumer prices rising 0.6% from August and annual inflation accelerating from 3.4% to 3.7%, above the 3.6% forecast. Gasoline prices climbed 9.1% during September and accounted for more than half of the monthly rise in the headline index. Energy prices rose 5.2% month over month and 20.4% annually. Core consumer prices increased 0.3% monthly and 2.6% annually, up from 2.4% in August. CoinShares argued that higher expected rates raise returns on interest-bearing assets, making Bitcoin less attractive to some investors. Bitcoin fell below $82,000 following the release, trading near $81,900 after a daily high above $84,100. CoinShares cited $79,664 as a nearby technical support level based on the Supertrend indicator.
The U.S. Census Bureau reported on October 15 that retail and food services sales reached $745 billion in September, up 0.8% from August and 6.3% from September 2025, against expectations of about 0.3%. August's increase was revised to 1.3% from 1.1%. Gasoline station sales rose 6.4%, and excluding gasoline, monthly growth slowed to 0.2% from 1.0% in August. The figures are not adjusted for inflation. CoinShares warned that sustained energy costs could constrain household spending on other goods later in the year. A separate producer price report showed wholesale prices rising 1.3% monthly and 6.3% annually, the largest monthly increase since March 2022, as Bitcoin traded near $81,500 and fell roughly 3.6% over 24 hours.
Market expectations for Federal Reserve policy shifted more hawkishly. CoinShares cited Polymarket data showing about a 75% probability of unchanged rates at the October meeting and 25% for a quarter-point increase as of October 15. These prediction market figures are not Federal Reserve forecasts. CoinShares said futures pricing had moved toward additional tightening before year-end. The Fed raised its benchmark rate by 25 basis points in September to a 3.75%-4.00% target range. New York Fed President John Williams, in remarks on October 13, suggested another increase could be appropriate before the end of 2026, though he is one policymaker and the October decision remains pending.
CoinShares expects upcoming data to drive crypto prices through rate expectations, identifying cooling inflation or weaker activity as developments that could ease pressure for tightening. Key upcoming releases include third-quarter GDP and September PCE data on October 29 and the advance October retail sales report on November 17. The analysis reflects the firm's outlook and is not investment advice.
The Bureau of Labor Statistics data released October 14 showed consumer prices rising 0.6% from August and annual inflation accelerating from 3.4% to 3.7%, above the 3.6% forecast. Gasoline prices climbed 9.1% during September and accounted for more than half of the monthly rise in the headline index. Energy prices rose 5.2% month over month and 20.4% annually. Core consumer prices increased 0.3% monthly and 2.6% annually, up from 2.4% in August. CoinShares argued that higher expected rates raise returns on interest-bearing assets, making Bitcoin less attractive to some investors. Bitcoin fell below $82,000 following the release, trading near $81,900 after a daily high above $84,100. CoinShares cited $79,664 as a nearby technical support level based on the Supertrend indicator.
The U.S. Census Bureau reported on October 15 that retail and food services sales reached $745 billion in September, up 0.8% from August and 6.3% from September 2025, against expectations of about 0.3%. August's increase was revised to 1.3% from 1.1%. Gasoline station sales rose 6.4%, and excluding gasoline, monthly growth slowed to 0.2% from 1.0% in August. The figures are not adjusted for inflation. CoinShares warned that sustained energy costs could constrain household spending on other goods later in the year. A separate producer price report showed wholesale prices rising 1.3% monthly and 6.3% annually, the largest monthly increase since March 2022, as Bitcoin traded near $81,500 and fell roughly 3.6% over 24 hours.
Market expectations for Federal Reserve policy shifted more hawkishly. CoinShares cited Polymarket data showing about a 75% probability of unchanged rates at the October meeting and 25% for a quarter-point increase as of October 15. These prediction market figures are not Federal Reserve forecasts. CoinShares said futures pricing had moved toward additional tightening before year-end. The Fed raised its benchmark rate by 25 basis points in September to a 3.75%-4.00% target range. New York Fed President John Williams, in remarks on October 13, suggested another increase could be appropriate before the end of 2026, though he is one policymaker and the October decision remains pending.
CoinShares expects upcoming data to drive crypto prices through rate expectations, identifying cooling inflation or weaker activity as developments that could ease pressure for tightening. Key upcoming releases include third-quarter GDP and September PCE data on October 29 and the advance October retail sales report on November 17. The analysis reflects the firm's outlook and is not investment advice.
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