Bitcoin rises above $80,000 after Fed governor hints at holding interest rates

Bitcoin rose above $80,000 on Thursday after Federal Reserve Governor Christopher Waller said he would likely support keeping interest rates unchanged at the next meeting if upcoming economic data remains steady.

The shift reversed a week of market expectations that had favored a rate increase following a recent speech by Fed Chair Kevin Warsh. Bitcoin’s price moved higher alongside gold, stocks, and Treasury bonds.

Bitcoin last traded at $80,510, up 4.8% in 24 hours and 1.1% over the past week, according to CoinGecko. Other major cryptocurrencies, including Ether, XRP, Solana, and BNB, also saw gains.

Waller ties decision to inflation data

In a Reuters interview, Waller stated that his decision would depend heavily on the August inflation report, set for release on September 11. He noted that three-month core inflation remains above the Fed’s 2% target, and the labor market is still strong, with unemployment at 4.1%.

Market reaction and economic signals

Traders on Polymarket reduced the odds of a September rate hike from 59% to 43% after Waller’s comments. The ISM Services PMI report, released the same day, showed strong business activity and rising prices, which could argue for tighter policy. However, Treasury yields and gold prices moved in line with Bitcoin, suggesting a broader shift in market sentiment.

Crypto market snapshot

The total value of the crypto market reached $2.74 trillion, with Bitcoin accounting for 58.93% of that total. U.S. spot Bitcoin exchange-traded funds (ETFs), which track Bitcoin’s price and trade like stocks, saw $101.1 million in inflows on Wednesday, reversing two days of outflows. Ether ETFs, which do the same for Ether, saw $23.5 million in outflows.

Among individual tokens, Arbitrum led weekly gains with a 46.7% increase, while Lighter (LIT) and Cardano (ADA) also posted strong daily performances. Privacy-focused coins like Zcash and XRP also rose, continuing a recent trend.

Analysts weigh in on Bitcoin’s resilience

Ryan Lee, chief analyst at Bitget, noted that Bitcoin had held steady despite macroeconomic pressures, including high oil prices and rising Treasury yields. He suggested that reduced leverage and stable ETF demand had helped support the market. However, Paul Howard of Wincent warned that rising U.S. dollar rates could still pressure markets, with some traders betting on a pullback.

Sources

• The Defiant