September CPI rose 3.7% year over year, above expectations: How to safeguard on-chain funds during a high-volatility cycle
The September Consumer Price Index (CPI) data released by the U.S. Bureau of Labor Statistics (BLS) on the evening of October 14, Beijing time, dashed market optimism about easing inflation and directly reshaped expectations for the Federal Reserve’s rate path. September CPI rose 3.7% year over year, up from 3.4% in August and above the market forecast of 3.6%; month over month, it rose 0.6%, in line with expectations. Core CPI was even more striking: excluding food and energy, it rose 2.6% year over year, above the expected 2.5%, and climbed 0.3% month over month, significantly exceeding the forecast of 0.2%. Taken together, these figures suggest that despite sharp swings in energy prices, underlying inflation remains sticky and may even be accelerating. At the macro level, following the release, the market’s expectation that the Fed would tighten policy at its late-October meeting rose sharply. The CME FedWatch tool showed that the probability of another rate hike at the October meeting jumped from around 22% before the release to a range of 44% to 49%. Meanwhile, the 2-year Treasury yield rose about 13 basis points to around 4.92%, while the 10-year yield gained about 9 basis points to around 5.31%, nearing a 24-year high. This abrupt tightening in the macro-financial environment directly weighed on risk assets. As a high-beta asset class, the crypto market was among the first to feel the valuation pressure caused by tighter liquidity.
At the asset-price level, both Bitcoin and Ethereum saw significant pullbacks. After the data was released, Bitcoin fell about $1,000 in the short term, briefly dropping below the key psychological threshold of $83,000 before declining further to around $81,500. It was down 1.5% at $82,142. Ethereum performed even more poorly, falling 2.8% to $2,440. The total crypto-asset market capitalization fell to around $2.8 trillion. Notably, the decline was not simply panic selling; it also involved a sharp leveraged-position flush. More than $281 million in derivatives positions were liquidated over 24 hours, most of them Bitcoin long positions. This reflects the heavy funding-cost pressure and stop-loss risks faced by long-position holders amid expectations of higher interest rates. Structurally, gasoline prices rose 9.1% month over month in September and a striking 34.2% year over year; the energy index climbed 5.2% month over month, making it a major driver of headline inflation. However, core CPI remained at 0.3% month over month for a second consecutive month. Core CPI had fallen to a low of 2.4% year over year in August before rebounding to 2.6% in September, suggesting the inflation rebound was not driven by energy alone. Services and housing costs, which rose 0.4% month over month, also contributed. BLS data released the same day showed that real average hourly earnings for all employees fell 0.5% in September. This means households’ purchasing power was further eroded by inflation, and consumer-side tightening may lag policy-side tightening, creating a double squeeze.
Against a macroeconomic backdrop of high volatility and high interest rates, on-chain security risks and liquidity concerns have been amplified. According to figures from PeckShield and CertiK, losses from major global crypto security incidents in September 2026 were approximately $766.5 million and $768.4 million, respectively—both record highs for a single month this year. CertiK reported that cumulative losses in the third quarter reached $1.26 billion, while losses for the first three quarters totaled as much as $2.68 billion. These figures indicate that during periods of severe market turbulence, security incidents—including hacker attacks, smart-contract exploits, and insider misconduct—are frequent, and losses are growing. In recently disclosed cases, funds were moved extremely quickly and had often already been converted and bridged to other chains or sent to exchanges by the time the incidents were made public. This creates significant challenges for tracking and freezing the funds. For example, in the 79thVault incident, the flow of funds was publicly flagged on the day of the attack, and the attacker returned most of the funds the following day. More than $270 million was also reportedly returned in the Liquid Network incident. These cases show that the transparency of on-chain data played a key role in recovering funds after the fact—but only when the funds’ destinations were clearly visible and they had not been rapidly mixed. The knock-on effects at the platform level should also not be overlooked. When a security incident occurs or risk controls are tightened, users may face withdrawal restrictions, account verification, and other procedures, leaving their funds inaccessible for a period of time. During a market downturn, this can heighten investors’ liquidity concerns.
For market participants, the central challenge is the interplay between macro interest-rate expectations and the security of on-chain assets. On the one hand, rising interest rates make non-yielding assets like Bitcoin less attractive compared with interest-bearing bonds. Funds may shift from high-risk assets to fixed-income products, keeping pressure on crypto-market liquidity. The key upcoming milestones include September PPI data, the Fed’s rate decision on October 28, and October CPI data due on November 10. These indicators will help determine whether inflation expectations become further entrenched. On the other hand, periods of high volatility are often accompanied by a surge in security incidents. Alongside price fluctuations, investors must pay close attention to the security of their asset custody. On-chain data tracking shows that the speed and transparency of fund transfers are key factors in determining whether assets can be recovered, while platforms’ risk controls and compliance procedures can affect the availability of funds to some extent. In this environment, price speculation alone is no longer enough to manage risk. Secure storage, rapid tracking mechanisms, and compliant liquidity management have become more important considerations. Market pricing is reflecting a more cautious reality: with inflation not yet fully subdued, the rate path facing upside risks, and on-chain security threats persisting, crypto assets’ high volatility is not merely a product of market sentiment—it also reflects the combined impact of macro-financial constraints and micro-level security risks. Investors should beware of leverage risks and avoid indiscriminately increasing leverage amid expectations of higher interest rates. They should also strengthen the management of their asset security to ensure that funds remain liquid and secure even in extreme market conditions.
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The September Consumer Price Index (CPI) data released by the U.S. Bureau of Labor Statistics (BLS) on the evening of October 14, Beijing time, dashed market optimism about easing inflation and directly reshaped expectations for the Federal Reserve’s rate path. September CPI rose 3.7% year over year, up from 3.4% in August and above the market forecast of 3.6%; month over month, it rose 0.6%, in line with expectations. Core CPI was even more striking: excluding food and energy, it rose 2.6% year over year, above the expected 2.5%, and climbed 0.3% month over month, significantly exceeding the forecast of 0.2%. Taken together, these figures suggest that despite sharp swings in energy prices, underlying inflation remains sticky and may even be accelerating. At the macro level, following the release, the market’s expectation that the Fed would tighten policy at its late-October meeting rose sharply. The CME FedWatch tool showed that the probability of another rate hike at the October meeting jumped from around 22% before the release to a range of 44% to 49%. Meanwhile, the 2-year Treasury yield rose about 13 basis points to around 4.92%, while the 10-year yield gained about 9 basis points to around 5.31%, nearing a 24-year high. This abrupt tightening in the macro-financial environment directly weighed on risk assets. As a high-beta asset class, the crypto market was among the first to feel the valuation pressure caused by tighter liquidity.
At the asset-price level, both Bitcoin and Ethereum saw significant pullbacks. After the data was released, Bitcoin fell about $1,000 in the short term, briefly dropping below the key psychological threshold of $83,000 before declining further to around $81,500. It was down 1.5% at $82,142. Ethereum performed even more poorly, falling 2.8% to $2,440. The total crypto-asset market capitalization fell to around $2.8 trillion. Notably, the decline was not simply panic selling; it also involved a sharp leveraged-position flush. More than $281 million in derivatives positions were liquidated over 24 hours, most of them Bitcoin long positions. This reflects the heavy funding-cost pressure and stop-loss risks faced by long-position holders amid expectations of higher interest rates. Structurally, gasoline prices rose 9.1% month over month in September and a striking 34.2% year over year; the energy index climbed 5.2% month over month, making it a major driver of headline inflation. However, core CPI remained at 0.3% month over month for a second consecutive month. Core CPI had fallen to a low of 2.4% year over year in August before rebounding to 2.6% in September, suggesting the inflation rebound was not driven by energy alone. Services and housing costs, which rose 0.4% month over month, also contributed. BLS data released the same day showed that real average hourly earnings for all employees fell 0.5% in September. This means households’ purchasing power was further eroded by inflation, and consumer-side tightening may lag policy-side tightening, creating a double squeeze.
Against a macroeconomic backdrop of high volatility and high interest rates, on-chain security risks and liquidity concerns have been amplified. According to figures from PeckShield and CertiK, losses from major global crypto security incidents in September 2026 were approximately $766.5 million and $768.4 million, respectively—both record highs for a single month this year. CertiK reported that cumulative losses in the third quarter reached $1.26 billion, while losses for the first three quarters totaled as much as $2.68 billion. These figures indicate that during periods of severe market turbulence, security incidents—including hacker attacks, smart-contract exploits, and insider misconduct—are frequent, and losses are growing. In recently disclosed cases, funds were moved extremely quickly and had often already been converted and bridged to other chains or sent to exchanges by the time the incidents were made public. This creates significant challenges for tracking and freezing the funds. For example, in the 79thVault incident, the flow of funds was publicly flagged on the day of the attack, and the attacker returned most of the funds the following day. More than $270 million was also reportedly returned in the Liquid Network incident. These cases show that the transparency of on-chain data played a key role in recovering funds after the fact—but only when the funds’ destinations were clearly visible and they had not been rapidly mixed. The knock-on effects at the platform level should also not be overlooked. When a security incident occurs or risk controls are tightened, users may face withdrawal restrictions, account verification, and other procedures, leaving their funds inaccessible for a period of time. During a market downturn, this can heighten investors’ liquidity concerns.
For market participants, the central challenge is the interplay between macro interest-rate expectations and the security of on-chain assets. On the one hand, rising interest rates make non-yielding assets like Bitcoin less attractive compared with interest-bearing bonds. Funds may shift from high-risk assets to fixed-income products, keeping pressure on crypto-market liquidity. The key upcoming milestones include September PPI data, the Fed’s rate decision on October 28, and October CPI data due on November 10. These indicators will help determine whether inflation expectations become further entrenched. On the other hand, periods of high volatility are often accompanied by a surge in security incidents. Alongside price fluctuations, investors must pay close attention to the security of their asset custody. On-chain data tracking shows that the speed and transparency of fund transfers are key factors in determining whether assets can be recovered, while platforms’ risk controls and compliance procedures can affect the availability of funds to some extent. In this environment, price speculation alone is no longer enough to manage risk. Secure storage, rapid tracking mechanisms, and compliant liquidity management have become more important considerations. Market pricing is reflecting a more cautious reality: with inflation not yet fully subdued, the rate path facing upside risks, and on-chain security threats persisting, crypto assets’ high volatility is not merely a product of market sentiment—it also reflects the combined impact of macro-financial constraints and micro-level security risks. Investors should beware of leverage risks and avoid indiscriminately increasing leverage amid expectations of higher interest rates. They should also strengthen the management of their asset security to ensure that funds remain liquid and secure even in extreme market conditions.
Follow me so you don’t miss the next quick market update.