Bitcoin rallies past $81k as rate hike fears cool, regulatory hopes grow

On Friday, Bitcoin surged by 4.2% to reach $80,943.6, extending a recent rebound as fears about an imminent U.S. interest rate hike diminished. Encouraging remarks from top U.S. officials on regulation bolstered cryptocurrency sentiment. Bitcoin briefly hit a near four-month high above $82,000 in the previous session. The absence of new military action between the U.S. and Iran also provided market relief.

Crypto stocks experienced significant gains overnight, with leading Bitcoin holder Strategy surging nearly 18% in Thursday’s session. Analysts predict a 3.5% increase for Bitcoin this week, marking its third consecutive week of gains. The rally was driven by a sharp decline in U.S. Treasury yields, following comments from Federal Reserve Governor Christopher Waller who indicated a preference to maintain steady interest rates during the upcoming Fed meeting.

Waller's comments reduced the chances of a September interest rate hike, with the CME Fedwatch indicating a 50.4% probability, down from over 60% earlier in the week. Steady rates are favorable for Bitcoin due to its sensitivity to yield fluctuations. Earlier this month, Bitcoin's rally was halted by a brief surge in yields. The late-August surge was encouraged by Securities and Exchange Commission Chair Paul Atkins' comments, stating his expectation of a Senate vote on the Clarity Act by September 15.

Atkins also announced the SEC's preparation of its own crypto legislation that could complement the stalled Clarity Act. Other major cryptos, such as Ethereum, XRP, BNB, Solana, Cardano, Dogecoin, and $TRUMP, also experienced notable gains during the week.