Key facts
- Bitcoin surged above $61,000 following Federal Reserve Chair Kevin Warsh's comments on easing inflation risks.
- Warsh indicated that inflation risks have decreased and reaffirmed the Fed's commitment to a 2% inflation target.
- The Federal Reserve will make a decision on potential interest rate hikes in four weeks.
- Solana led cryptocurrency gains, rising 4% daily and 16% weekly.
- Tech and AI stocks experienced a significant sell-off, with South Korea's Kospi index falling nearly 8%.
Bitcoin climbed back above $61,000, marking a 4.1% gain in 24 hours, following comments from Federal Reserve Chair Kevin Warsh that suggested inflation risks had eased. This development provided a boost to the cryptocurrency market, which had experienced a period of decline. Solana led the gains among major cryptocurrencies, with a roughly 4% increase on the day and a significant 16% rise over the past week. Ether also saw a modest gain, trading up about 3% on the day, while XRP held steady.
The cryptocurrency's rebound occurred against a backdrop of a sharp sell-off in tech and AI-related stocks. South Korea's Kospi index fell nearly 8%, with major chipmakers Samsung Electronics and SK Hynix losing substantial market value due to renewed concerns about artificial-intelligence chip demand and potential oversupply. Meta's announcement of plans to sell spare computing power further fueled these worries, raising questions about whether the buildout of AI infrastructure has outpaced actual demand.
Analysts suggest that while Bitcoin's push above $61,000 offers some distance from key support levels, the market remains sensitive to upcoming economic data. Friday's U.S. jobs report is anticipated to influence expectations for interest rates and market direction in July. The recent performance of Bitcoin has contrasted with the strong performance of AI-related stocks earlier in the quarter, during which capital had rotated out of crypto and into the tech sector.