Bitcoin Surges Past $80,000 as Fading Fed Rate Hike Bets Fuel Crypto Rally

Bitcoin surged past the $80,000 threshold on Thursday as a shift in monetary policy expectations triggered a broad rally across risk assets. The move was accompanied by a sharp rise in the shares of cryptocurrency-related companies, which saw double-digit percentage gains.

As of Thursday's trading, Bitcoin was up over 5% to approximately $80,800, while Ethereum climbed more than 4.8% to around $2,494, according to data from Investing.com.

Fed Rate Hike Odds Tumble

The primary catalyst for the market's bullish turn was a significant repricing of Federal Reserve interest rate expectations. A new report showed U.S. initial jobless claims for the prior week increased more than anticipated, signaling potential cooling in the labor market and reducing the urgency for further monetary tightening.

Sentiment was further bolstered by comments from Fed Governor Christopher Waller, who stated he would support holding interest rates steady at the September meeting if upcoming August inflation data indicates that price pressures are easing. Following these developments, the probability of a 25-basis-point rate hike at the Sept. 15-16 FOMC meeting fell from 63.2% on Wednesday to 50.4%, according to the CME FedWatch Tool.

Crypto Stocks Rally on Bitcoin's Strength

The surge in cryptocurrency prices provided a strong tailwind for publicly traded companies in the digital asset sector. These stocks often act as high-beta plays on the underlying assets, exhibiting greater volatility.

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Key movers on Thursday included:

• Circle (CRCL): +13%
• MicroStrategy (MSTR): +12%
• Galaxy Digital (GLXY): +11%
• Coinbase (COIN): +8.9%

Cryptocurrency mining firms also experienced a broad-based rally. Bit Digital (BTBT) gained 11%, Marathon Digital (MARA) rose 10%, Hive Digital (HIVE) climbed 8.8%, and Riot Platforms (RIOT) advanced 7.5%. The rally comes after spot Bitcoin ETFs in the U.S. recorded approximately $3.5 billion in net inflows in August, their largest monthly inflow in over a year.

Robinhood Outperforms on Blockchain Revenue

Robinhood Markets (HOOD) was a standout performer, with its shares jumping as much as 15%. Beyond the positive market sentiment, the company benefited from strong performance data from its proprietary blockchain.

According to data from DeFiLlama, the Robinhood Chain generated approximately $4.32 million in revenue over the past 24 hours, placing it ahead of major networks like Solana ($3.98 million) and Ethereum ($1.75 million) for the period. This data highlights the growing potential of Robinhood's digital asset ecosystem as a significant revenue source.