Bitcoin climbed back above US$81,000 on Friday morning, after investors scaled back bets on a further interest rate hike from the Federal Reserve as early as September. The cryptocurrency touched a daily high of US$81,900, having fallen to near US$77,500 at yesterday's intraday low.
This morning, Bitcoin is up 4.2%, trading at US$81,088 over 24 hours. In euros, the world's largest cryptocurrency stood at roughly 69,635 EUR, according to data from Portal do Bitcoin. Ethereum, meanwhile, jumped 5% to US$2,524. XRP rose 6.2%, Solana advanced 3.5% and BNB gained 2.5%.
The move was driven by a repricing in the US interest rate market. After the odds of a rate hike had climbed to 63% earlier in the week, bets fell back to near 50% following remarks from Fed governor Christopher Waller, who signalled support for holding rates steady should inflation continue to show signs of easing.
As a result, Treasury yields lost momentum. The yield on the 10-year US Treasury note fell back below 4.8%, easing pressure on risk assets. Lower rates tend to favour Bitcoin, as they reduce the appeal of government bonds and increase appetite for assets with no yield of their own, such as cryptocurrencies and gold.
The relief came at a time when markets are still grappling with oil above US$90 and fiscal concerns in the United States. Mohamed El-Erian, economist and president of Queens' College, Cambridge, told CNBC he sees no immediate appetite for fiscal consolidation in the United States, which could keep upward pressure on rates. For Bitcoin, however, this scenario cuts both ways: higher rates weigh on prices in the short term, but when they reflect fiscal concern rather than economic growth, they can also reinforce demand for scarce assets outside the fiat system.
ETFs post largest inflow since January
Beyond the shift in rate expectations, US spot Bitcoin ETFs gave the market an important boost. The funds recorded net inflows of roughly US$731 million on Thursday, the largest daily volume since January, according to data from SoSoValue.
BlackRock's IBIT accounted for most of the flow, with approximately US$454 million in inflows. Ark and 21Shares' ARKB took in around US$138 million, while Fidelity's FBTC attracted US$74 million. The move reversed the US$236 million outflow recorded on Tuesday, when IBIT itself had led redemptions.
The ETFs closed the day with US$103.34 billion in net assets, equivalent to just over 6% of Bitcoin's market capitalisation. Since the launch of the US spot funds in January 2024, cumulative net inflows have reached US$55.44 billion.
The market is now watching whether the inflow was merely a one-off reaction to falling rates or the start of a fresh run of institutional buying. A second strong session, particularly if flows again top US$500 million, could reinforce the case for a more consistent return of ETF demand.
Payrolls report could decide Bitcoin's next move
The next test for Bitcoin comes later on Friday, with the release of the US jobs report for August. Economists surveyed by AP expect 65,000 jobs to have been added during the month, following an unexpected loss of 23,000 jobs in July, when the unemployment rate rose from 4.1% to 4.2%.
A weaker-than-expected figure would likely further reduce bets on a Fed rate hike, which could keep Bitcoin above US$80,000 and open the way for fresh attempts higher. A strong payrolls report, especially if accompanied by wage pressure, could reignite expectations of higher rates and a stronger dollar, weighing on BTC again.
The broader global backdrop also helped. International stock markets advanced ahead of the payrolls report, while the dollar stabilised after falling to its lowest level since May. The VIX, Wall Street's so-called "fear index", eased to near 14 points, indicating lower demand for protection in the options market.
Despite the gain, Bitcoin still needs to confirm strength above US$81,000. The ETF recovery, the pullback in rate-hike bets and a benign payrolls report could keep BTC pushing towards fresh recent highs. But a reversal in the dollar or in Treasury yields could still turn the recovery into another test of the US$76,000 to US$80,000 range that has dominated recent days.
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