Crucially, BTC has been under pressure since the US government shutdown, President Trump’s tariff threats against China, and fading bets on a December Fed rate cut.
However, reports of an MSCI consultation paper, potentially leading to the reclassification of digital asset treasury companies (DATs) to funds, also spooked investors.
US BTC-Spot ETFs Bleed for a Fourth Week
Headwinds have collided in the fourth quarter, triggering BTC’s largest monthly drawdown since June 2022’s 37% loss. BTC has fallen 22.4% in November, leaving the token at risk of its first calendar year loss since 2022.
The US government shutdown kick-started the October reversal. The shutdown delayed key US economic reports, fueling uncertainty about inflation and the labor market. Fed speakers raised concerns about inflation, while downplaying the cooling labor market, which lowered bets on a December Fed rate cut.
According to the CME FedWatch Tool, the probability of a December Fed rate cut fell from 95.5% on October 22 to 44.4% on November 14. However, NY Fed President John Williams revived hopes for a December rate cut on Friday, November 21, signaling a potential cut. The chances of a December cut jumped to 71.0% on November 21.
Meanwhile, President Trump threatened to hike tariffs on Chinese shipments by 100% on October 10, adding to the negative sentiment.