The Bitcoin price surged late Thursday morning (3rd) and climbed back above $80,000, after investors trimmed bets that the Federal Reserve will raise interest rates this month. At around 1pm (Brasília time), BTC traded at $81,320, up 5.6% on the day, after touching an intraday low below $77,000.
The trigger for the turnaround came from remarks by Fed governor Christopher Waller, who signalled a preference for holding rates steady at the September meeting if upcoming data confirm signs of cooling inflation. His comments eased some of the pressure built up last week by Fed chair Kevin Warsh's tougher tone at Jackson Hole.
Treasury yields eased in response. The yield on the 10-year US Treasury note fell to near 4.75%, after touching 4.82% the previous day, while the 2-year yield dropped to about 4.33%. Lower rates tend to favour risk assets with no yield of their own, such as technology stocks, gold and cryptocurrencies.
The shift also showed up in market-implied probabilities. According to the Financial Times, the odds of a September rate hike fell from 59% to around 50% after Waller's remarks. Earlier in the day, market platforms still pointed to bets above 60%, though down from their recent peak.
Read also: 9 cryptocurrencies that could surge in September, according to analysts
According to Pedro Fontes, research analyst at Mercado Bitcoin, Bitcoin's recovery above $80,000 is an important show of strength after it defended the $77,000 level. "Now, the point will be to watch whether the asset can hold this region and set new recent highs above $81,000," he says.
"Given the scale of the move, it also raises the chance of seeing renewed net inflows into spot Bitcoin ETFs by the close of the day. If confirmed, that would extend the recovery seen on 2 September, when the products took in more than $100 million, reinforcing that the move is being accompanied by real demand rather than just short covering," Fontes explains.
Weaker dollar helps Bitcoin
Another important factor behind the gain was the weakening of the dollar. The DXY index fell below 99, easing pressure on risk assets. Part of that move came from a stronger Japanese yen, driven by bets that the Bank of Japan may raise rates at its next meeting.
A strong dollar had been one of the main brakes on Bitcoin in recent days. When the US currency rises, investors tend to cut exposure to alternative assets. With the DXY falling, BTC found room to break back above the $80,000 range.
The move came even as oil remained at elevated levels. WTI continues to trade above $90 a barrel, pressured by tensions involving the United States and Iran. In theory, more expensive oil raises the risk of inflation and narrows the Fed's room to ease monetary policy, but Waller's remarks weighed more heavily on markets this morning.
The recovery also came after Bitcoin showed resilience around the $76,000 region. Analysts at Bitfinex noted that the average cost basis of active investors on the network sits near $76,350. BTC came close to that level before buyers stepped in, reinforcing the reading of support in that range.
Crypto-linked stocks also surge
Bitcoin's rally pulled up crypto-linked companies on Wall Street. Strategy, the world's largest corporate holder of Bitcoin, rose nearly 12% on the day. Coinbase gained more than 9%, while Robinhood surged about 15%.
The move contrasts with weakness in some semiconductor and memory-chip stocks, which had led much of the equity rally in the first half of the year. The rotation suggests investors have returned to assets more sensitive to liquidity and risk appetite, such as cryptocurrencies and related stocks.
Among altcoins, the day was also positive. XRP led the largest cryptocurrencies, jumping more than 8%, while BNB and Solana tracked the recovery, each rising more than 5%. Ethereum, however, lagged, up 3% and approaching the $2,500 region.
Despite the gain, the outlook still hinges on upcoming US data. Friday's payrolls report and the consumer price index, due on 11 September, are expected to weigh on the Fed's decision at its 15-16 September meeting. A weaker jobs reading could further reduce bets on a rate hike and keep Bitcoin above $80,000. Strong figures, on the other hand, could reignite pressure on Treasuries, the dollar and risk assets.
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