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Bitcoin back above $81,000 as hike odds fade, Zcash leads with 15% jump
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- DeepHorus
Bitcoin surged above $81,000 on Friday, marking a 4% daily gain, as traders dramatically lowered their expectations for a Federal Reserve interest rate hike this September. The shift in sentiment was triggered by dovish comments from Fed Governor Christopher Waller, who signaled support for holding rates steady if inflationary pressures continue to ease. This pivotal change sent bond yields lower and ignited a broad rally in risk assets, including equities and cryptocurrencies.
The immediate catalyst for the crypto market's uplift was the CME FedWatch tool, which now indicates the odds of a September rate increase have fallen to roughly 50%. Earlier in the week, those odds were above 63%, highlighting a swift repricing in financial markets. This macroeconomic backdrop provided a fertile environment for digital assets to gain.
Bitcoin was not alone in its ascent. Privacy-focused token Zcash led the major cryptocurrencies with a nearly 15% jump in 24 hours, and an impressive 20% gain over the past week. Other significant performers included Hyperliquid's HYPE token and XRP, which both rose approximately 6%. Ether, BNB, and Dogecoin also advanced between 4% and 5%, while Solana and TRON saw more modest increases.
The institutional appetite for Bitcoin was evident in the U.S. spot Bitcoin exchange-traded funds (ETFs), which recorded provisional inflows of about $277 million on Thursday. However, analysts note that these funds have not yet established a consistent pattern of daily inflows, which would be necessary to confirm sustained institutional demand. The market is watching closely to see if this positive trend continues through the end of the week.
The broader financial markets mirrored this risk-on sentiment. MSCI's Asia Pacific equity gauge climbed nearly 1%, and the MSCI All Country World Index advanced for a third consecutive day. In currency markets, the U.S. dollar steadied after a slide, while the Japanese yen strengthened significantly, reaching a near one-month high against the dollar.
The yen's sharp rally, driven by speculation on Bank of Japan rate hikes, typically exerts downward pressure on carry trades that fund risk assets. Notably, Bitcoin absorbed this potential negative pressure without relinquishing its gains, suggesting robust underlying demand.
Looking ahead, market participants will be focused on whether the positive momentum in Bitcoin ETF inflows persists. A sustained buying streak from institutions would signal that they view the Federal Reserve's dovish pivot as a durable shift in monetary policy. The resilience of major cryptocurrencies amid currency market volatility will also be a key metric for gauging the market's strength in the coming days.
