Fed Hike Looms: Bitcoin Traders Hedge Bets with Stablecoin Shift
Bitcoin traders are cautiously approaching Wednesday's expected Federal Reserve rate hike, but they're not panicking. Markets have priced in a 92.5% chance of a quarter-point hike after strong employment data and stubborn inflation.
Despite the certainty surrounding the Fed decision, some investors are hedging their bets. Research analyst Cooper Duschang at Talos notes that there has been a 28% net buying tilt toward stablecoins ahead of the meeting, compared to an average 8% selling tilt in previous Federal Open Market Committee meetings.
The appetite for Bitcoin and Ether has also shifted, with buying conviction dropping to 3% from 10% for Bitcoin, and 9% from 23% for Ether. Duschang attributes this trend to investors reducing risk and holding greater liquidity ahead of the Fed decision.