Bitcoin Surpasses $81,000 as Rate Hike Fears Subside and Regulatory Hopes Rise

Bitcoin surged past $81,000 on Friday, reaching a near four-month high as investor sentiment improved on two key fronts: easing fears of an imminent U.S. interest rate hike and renewed optimism for regulatory progress in Washington.

As of 02:22 ET (06:22 GMT), the world's largest cryptocurrency was up 4.2% to $80,943.6, according to Investing.com data. The move positions Bitcoin for a weekly gain of 3.5%, marking its third consecutive week of advances.

Easing Rate Hike Expectations

The rally gained momentum after comments from a key U.S. central banker cooled expectations for another interest rate increase. Federal Reserve Governor Christopher Waller told Reuters he is leaning towards keeping rates steady when the Fed meets later this month, pending upcoming inflation data.

Following his remarks, the market-implied probability of a September rate hike fell significantly. The CME FedWatch Tool now indicates a 50.4% chance, down from over 60% earlier in the week. A stable or lower interest rate environment is often seen as favorable for speculative assets like Bitcoin, which are sensitive to shifts in bond yields.

Regulatory Optimism Grows

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Positive developments on the regulatory front also buoyed the market. According to the source report, former SEC Commissioner Paul Atkins said he expects the U.S. Senate to vote on the closely watched Clarity Act on September 15. The act is seen by many in the industry as a critical step toward establishing a clear legal framework for digital assets in the United States.

Atkins also noted that the Securities and Exchange Commission was preparing its own crypto-related legislation that could function alongside the Clarity Act, which has previously stalled in Congress.

Broader Market Impact

The positive sentiment lifted the broader digital asset market and related equities. Major cryptocurrencies and crypto-linked stocks posted strong gains.

• Ethereum, the second-largest cryptocurrency, rose 4% to $2,509.53.
• Other major altcoins also rallied, with XRP surging 6.1% and Cardano jumping 8%.
• Corporate Bitcoin holder MicroStrategy (MSTR) saw its shares rally nearly 18% in Thursday's trading session.