Federal Reserve Rate Hike Odds Jump to Eighty-Seven Percent as Core Inflation Beats Forecasts

Welcome to Chain Reaction, by Capital Copilot, your daily dose of the latest in cryptocurrency news, market insights, and blockchain trends. Let's get started! Bitcoin is trading at seventy-seven thousand three hundred seventeen dollars, Ethereum at two thousand five hundred thirty-two dollars, and Solana at one hundred two dollars. Federal Reserve rate hike odds just jumped to eighty-seven percent ahead of next week's policy meeting, Treasury yields are approaching five percent, and core inflation came in hotter than expected. August CPI data showed headline inflation holding at three point four percent year-over-year, matching forecasts. But the core reading rose zero point three percent monthly versus zero point two percent expected. That pushed Federal Reserve rate hike probability from seventy-two percent to eighty-seven percent. Markets now expect at least three rate hikes through June twenty twenty-seven, a dramatic reversal from early twenty twenty-six when investors anticipated four rate cuts. Despite the hawkish inflation data, Bitcoin initially dipped to seventy-six thousand seven hundred dollars but rallied to nearly seventy-nine thousand dollars before settling back. Ethereum climbed more than seven percent. The Crypto Fear and Greed Index jumped from fifty-six to seventy-three. Analysts suggest the hike may already be priced in, and some believe Bitcoin is trading as an inflation hedge. Bitcoin ETFs saw significant outflows this week totaling four hundred sixty-two million dollars. A R K B led with two hundred fifty million in outflows, followed by G B T C at one hundred twenty-nine million. Canada's financial regulator confirmed that tokenized deposits have the same legal status as traditional bank deposits. The Office of the Superintendent of Financial Institutions stated that tokenized deposits are not legally distinct from traditional deposits. This gives Canadian banks confidence to develop blockchain-based payment products without creating separate legal categories. India launched a six hundred twenty billion dollar tokenized bond experiment using its digital rupee. The pilot program, called Demat two point zero, allows corporate bonds to be issued as digital tokens on distributed ledgers. The system enables atomic delivery-versus-payment through the Reserve Bank of India's wholesale digital rupee. India is the first country to combine distributed ledger bonds, statutory depository records, and CBDC settlement within existing regulated infrastructure. Three companies have already raised one hundred sixteen million dollars. In a dramatic escalation, Blockstream rejected a fifty million dollar ransom demand from the hacker who exploited the Liquid sidechain. The attacker drained four thousand Bitcoin worth three hundred twenty million dollars but voluntarily returned three thousand four hundred Bitcoin. The hacker then demanded a ten percent bounty. Blockstream refused, calling it theft. Robinhood reported crypto trading volume rose sixty-one percent month-over-month to seventeen point five billion dollars in August. Event contracts traded four point seven billion times, up roughly fifteen-fold year-over-year. Solana's decentralized exchange volume crossed three trillion dollars cumulatively. Tokenized equity supply on Solana reached a record six hundred eighty-four million dollars, up forty-seven percent in three weeks. That's a wrap for today's edition of Chain Reaction by Capital Copilot. We hope you're feeling more informed and ready to navigate the cryptoverse. Until next time, keep your digital wallets ready!