Bitcoin Surges Past $81,000 as Fed Rate Hike Fears Ease, Regulatory Hopes Rise

Bitcoin surged on Friday, extending a recent rally to trade above the $81,000 level as investor concerns over an imminent U.S. interest rate hike subsided. Positive commentary from a former top U.S. regulator regarding long-awaited crypto legislation further bolstered market sentiment.

As of 5:28 AM ET, Bitcoin was up 4.3% at $81,069.6, according to Investing.com data. The leading cryptocurrency had briefly touched a near four-month high above $82,000 in the prior session and is on track for its third consecutive weekly gain.

Rate Hike Expectations Temper

A primary catalyst for the rally was a sharp slide in U.S. Treasury yields following comments from Federal Reserve Governor Christopher Waller. In an interview with Reuters, Waller indicated a preference for holding interest rates steady at the Fed's upcoming meeting, particularly if new inflation data shows a cooling of price pressures.

His remarks led to a significant repricing of market expectations. The probability of a September rate hike fell to 50.4%, down from over 60% earlier in the week, according to the CME FedWatch Tool. A stable or lower interest rate environment is typically seen as favorable for speculative, non-yielding assets like Bitcoin.

Regulatory Outlook Brightens

The market also drew support from signs of potential progress on U.S. cryptocurrency regulation. Former SEC Commissioner Paul Atkins stated that he expects the Senate to vote on the much-anticipated "Clarity Act" by September 15.

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Atkins called on lawmakers to pass the bill and send it to President Donald Trump for his signature by the end of the month. While the bill's progress has been slow due to disagreements over stablecoin yields and rules on crypto trading by policymakers, it is viewed as a major milestone for establishing regulatory legitimacy in the U.S.

Broader Crypto Market Rallies

The positive momentum lifted the broader digital asset market, with most major altcoins posting strong gains and heading for a third straight week of increases.

• Ethereum (ETH), the second-largest cryptocurrency, rose over 5% to $2,522.53.
• XRP jumped 6.6%, while BNB gained 2.5%.
• Other notable performers included Cardano (ADA), which soared 8%, and Solana (SOL), up 3.9%.

Crypto-related equities also rallied on the news. Shares of MicroStrategy (MSTR), the largest corporate holder of Bitcoin, surged nearly 18% in Thursday's trading.