Prices slide into the Fed meeting
Cryptocurrency prices kept falling on Oct. 27 as investors waited for the U.S. Federal Reserve to announce its latest interest-rate decision on Oct. 28. Bitcoin, the biggest digital asset by market value, changed hands at $79,700 U.S. early in the day, while Ethereum stood at $2,310 U.S. per token. The retreat was broad across the crypto market rather than confined to the two largest coins.[S1][S2][S3][S6]
The drop follows a volatile stretch for Bitcoin. Its price has fallen 6% over the past month, a reversal after it climbed more than 40% during the third quarter of the year. Coverage of the slide has been closely tied to the timing of the central bank's meeting, with market watchers framing the $80,000 level as a line Bitcoin has been crossing in both directions.[S1][S4]
A hold now, a hike later
Futures traders assign a 93% probability that the Fed leaves rates unchanged at its October gathering, which would keep the federal funds rate inside its present target band of 3.75% to 4%. Even so, traders and economists largely anticipate that the central bank will raise rates at its December meeting, given that U.S. inflation has remained stubbornly elevated.[S1]
That expectation matters for crypto because tighter monetary policy tends to weigh on risk assets. When rates rise, assets such as cryptocurrencies become less attractive relative to safer holdings, which helps explain why digital tokens have been losing ground before the decision is even announced.[S1]
Competition from AI stocks
Another factor is draining funds from crypto: investors are shifting capital back into artificial intelligence equities. Those AI-linked shares rose on Oct. 26, the day the startup Anthropic submitted paperwork for an initial public offering to be completed before this year ends. Anthropic is anticipated to bring in $100 billion U.S. at a valuation possibly reaching $2 trillion U.S., which would make it the biggest IPO ever seen on Wall Street.[S1]
Anthropic also stands out as the first among the frontier A.I. laboratories to list publicly, a point that has generated enthusiasm among investors. The company is anticipated to trade on the Nasdaq under the symbol ANT by the close of November. From the perspective of crypto investors, that offering gives yet another incentive to keep money parked outside digital assets.[S1]
