Bitcoin climbed back above $81,000 on Friday as traders reduced expectations for a Federal Reserve interest rate hike in September.
The move helped lift the broader cryptocurrency market, with every major token trading higher during Asian hours. However, most large-cap cryptocurrencies remain relatively flat on a weekly basis.
Bitcoin Reclaims $81,000 as Fed Hike Bets Fade
Bitcoin gained around 4% over 24 hours and traded above $81,000 during Friday’s Asian session.
The rally followed a sharp shift in interest rate expectations.
Traders now see roughly a 50% chance of a Federal Reserve rate increase this month. Earlier in the week, the probability had been above 63%, according to the CME FedWatch tool.
Lower expectations for tighter monetary policy pushed bond yields down and encouraged investors to move back into risk assets.
Waller Comments Boost Risk Sentiment
Federal Reserve Governor Christopher Waller helped trigger the latest market move.
Waller said he could support keeping interest rates unchanged if inflation continues to ease.
His comments reduced fears of another immediate rate increase and supported gains across several asset classes.
US Treasury bonds and gold also held onto gains from the previous New York trading session.
Zcash Surges 15% and Leads Crypto Market
Zcash was the strongest performer among major cryptocurrencies.
The token jumped nearly 15% over 24 hours and gained around 20% for the week.
Hyperliquid’s HYPE token rose approximately 6%, while XRP also gained close to 6%.
Ether, BNB and Dogecoin each advanced between 4% and 5%.
Solana climbed nearly 3%, while TRON gained just over 1%, making it one of the weakest major performers during the session.
Weekly Crypto Performance Remains Muted
Despite Friday’s broad rally, weekly gains across the cryptocurrency market remain relatively limited.
Bitcoin is up around 1% over the past seven days.
Ether and XRP are close to unchanged for the week.
Meanwhile, Solana and TRON have both declined by nearly 3% over the same period.
This suggests that Friday’s move has not yet developed into a broader sustained crypto rally.
Bitcoin ETFs Record Fresh Inflows
US spot Bitcoin exchange-traded funds recorded approximately $277 million in inflows on Thursday, based on provisional data.
The inflows followed four trading sessions that alternated between net buying and selling.
Investors are now watching whether Bitcoin ETFs can produce several consecutive days of inflows.
A sustained buying trend could provide stronger evidence that institutional investors are returning to the market.
Global Stocks Also Move Higher
The improvement in risk sentiment was not limited to cryptocurrencies.
Global equity markets continued to rise, with MSCI’s Asia Pacific index gaining nearly 1%.
The All Country World Index also advanced for a third consecutive session.
Meanwhile, the US dollar stabilized after falling to its weakest level since May.
An index tracking Asian currencies also climbed to levels last seen in October 2024.
Japanese Yen Strengthens Sharply
The Japanese yen attracted significant attention after strengthening around 2% on Thursday.
The move erased approximately one month of gradual losses.
Traders increased expectations for additional Bank of Japan interest rate hikes while also monitoring the possibility of official intervention to support the currency.
The yen later gave back part of its gains and traded near 156.35 per dollar after reaching around 155.30 in the previous session.
Bitcoin Holds Firm Despite Stronger Yen
A stronger yen can create pressure on global risk assets because it may reduce the attractiveness of yen-funded carry trades.
These strategies involve borrowing cheaply in yen and investing the funds in higher-yielding or riskier assets.
Despite the sharp move in the Japanese currency, Bitcoin maintained most of its gains.
The next key signal for the market could come from US spot Bitcoin ETF flows.
If inflows remain positive through the end of the week, it could suggest that institutional investors view the shift in Federal Reserve expectations as more than a short-term market reaction.
