Key facts
- Bitcoin price surged to approximately $80,270, up nearly 3% in 24 hours.
- Federal Reserve Governor Christopher Waller suggested holding interest rates steady.
- The likelihood of a September Fed rate hike fell to 50.4%.
- Over $415 million in short crypto positions were liquidated.
- Major stock indices and altcoins like Ethereum and XRP also experienced gains.
Bitcoin surged past the $80,000 mark, trading near $80,270 and up nearly 3% in the last 24 hours, driven by comments from Federal Reserve Governor Christopher Waller suggesting a pause in interest rate hikes. This sentiment shift also boosted other cryptocurrencies, including Ethereum and XRP, and contributed to a broader advance in the U.S. stock market.
Waller's remarks, indicating a potential hold on the benchmark interest rate if inflation data continues to improve, led traders to lower the odds of a September rate hike to 50.4%, down from 63.2% the previous day, according to CME FedWatch. Consequently, the 10-year Treasury yield fell to approximately 4.73%.
The rally in risk assets like cryptocurrencies and stocks is seen as a direct response to the Fed's less hawkish stance. Higher interest rates typically make riskier investments less attractive by increasing the yield on cash and bonds, and strengthening the dollar. A rate hold alleviates this pressure.
The upward price movement in crypto has also triggered a significant number of liquidations, particularly for short sellers. CoinGlass data indicates over $500 million in crypto liquidations in the past 24 hours, with more than $415 million stemming from short positions being forcibly bought back to limit losses. This phenomenon, known as a short squeeze, further amplified the price surge.
Major stock indices also benefited from the news, with the Dow Jones Industrial Average, S&P 500, and Nasdaq all posting gains. Tech stocks showed strength, with Nvidia confirming a substantial deal and Snowflake shares rising on positive earnings.