Bitcoin Nears $81,000 as Tech Rally Boosts Risk Assets Ahead of Fed Decision

Bitcoin's price climbed on Wednesday, approaching the $81,000 mark as a rally in technology stocks improved broader risk sentiment. The move came ahead of a key interest rate decision from the U.S. Federal Reserve expected later in the day.

By 01:27 ET (05:27 GMT), the world's largest cryptocurrency traded up 1.2% at $80,948.5, recovering from a low of $79,496.8 hit earlier in the week, according to data from Investing.com. Despite the daily gain, Bitcoin was on track to close October with a 3.2% loss.

Tech Rally Lifts Crypto Sentiment

The gains in digital assets appeared to follow a strong performance in the technology sector. A rally in tech and chipmaking stocks, sparked by strong earnings from memory chip giant SK Hynix, helped reinforce investor confidence in growth-oriented assets, including cryptocurrencies, which often trade in correlation with the tech-heavy Nasdaq index.

This renewed appetite for risk provided a tailwind for the crypto market. However, the source noted that the boom in artificial intelligence stocks has also presented competition for capital in recent months, with some investors favoring AI-related equities over more speculative crypto assets.

Federal Reserve Decision Looms

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Caution ahead of the Federal Reserve's policy announcement capped further upside. The central bank is widely expected to hold its benchmark interest rate steady at 4.0%. However, market participants are closely watching for any signals of a hawkish outlook, particularly given persistent U.S. inflation and rising energy prices.

A higher-for-longer interest rate environment typically weighs on speculative, risk-heavy assets like cryptocurrencies by increasing the appeal of safer, yield-bearing investments. Central bank meetings at the European Central Bank and the Bank of Japan are also on the calendar for later this week.

Broader Market Rebounds

Other major cryptocurrencies also advanced, recovering some recent losses alongside Bitcoin. Key altcoin movers included:

• Ether (ETH): Rose 2.2% to $2,355.47
• XRP: Gained 2.4% to trade at $1.3275
• Solana (SOL): Added 2.5%
• Dogecoin (DOGE): Increased by 3.4%