Bitcoin steadies around $82,000 as traders scale back Fed rate hike expectations

Bitcoin holds steady as markets cool on rate hike fears

Bitcoin traded near $82,000 on Friday after recovering from a decline below $80,000 the day before. Crypto markets stabilized alongside a rebound in South Korean tech stocks, and traders lowered their expectations for an upcoming Federal Reserve interest-rate increase.

Data from TradingView showed BTC holding most of the ground it had reclaimed after bouncing at $80,000 on Thursday.

Key numbers from the day

• Bitcoin traded around $82,000 on Friday morning Wall Street open.


• South Korea's KOSPI Composite Index rose 2% to close at 5,668, though it remained down 8.3% for the week after a steep tech sell-off.


• The odds of a 25-basis-point Federal Reserve rate hike in October fell to 15%, down from 27% the previous day, according to CME Group's FedWatch Tool.


• The US 10-year Treasury yield reached 5.13% before settling at 5.07%.


• The Nasdaq Composite Index fell 0.5% while the S&P 500 rose 0.5%.

What Warsh told the IMF

Federal Reserve Chair Kevin Warsh spoke with IMF Managing Director Kristalina Georgieva and gave no indication that further interest-rate hikes were coming. "I don't prejudge meetings. I don't believe in saying now what I might do at the meetings that we have in the balance of this year," Warsh said, according to an IMF publication.

Markets interpreted the comments as a dovish signal, meaning Warsh did not appear to favor raising rates at the next meeting.

Economist points to AI sector stress

Economist Robin Brooks suggested that stress in the AI sector — a key driver of the South Korea sell-off — may be influencing the Fed chair's cautious approach. He noted that fears of an AI blow-up could be making markets more receptive to a dovish message, and that the October rate-hike meeting is now "pretty much off the table."

Stocks and bonds in a tug-of-war

US bond yields rose as stocks steadied, prompting some market commentators to suggest the US Treasury may face a difficult choice between taming the bond sell-off and keeping stocks bullish. The market commentary group The Kobeissi Letter described the equity market as a paradoxical "bull-bear" environment, noting that stock weakness has been the main force behind recent bond-yield declines since August. The group added that without the US-Iran conflict, stocks would likely be far higher, but persistent inflation is driving investor demand for assets even as the Fed begins a new rate-hike cycle.

Why this matters for crypto investors

Bitcoin's ability to hold above $80,000 after a sharp drop shows that crypto markets are closely tied to broader financial conditions. When the Federal Reserve signals caution about raising interest rates, risk assets like Bitcoin tend to stabilize. The falling odds of an October rate hike provided a direct boost to market sentiment on Friday.

Sources

• Cointelegraph