Bitcoin price climbed sharply on Friday, extending its recovery as traders reduced expectations for an imminent U.S. interest-rate increase and responded to more constructive signals on cryptocurrency regulation.
Bitcoin rose 4.2% to $80,943.60 by 02:22 ET, according to Investing.com, after briefly moving above $82,000 during Thursday’s session. The latest advance followed a sharp decline earlier in the week and put the cryptocurrency on track for a third consecutive weekly gain.
The immediate catalyst was a change in U.S. monetary-policy expectations. Federal Reserve Governor Christopher Waller said he could support keeping interest rates unchanged at the September 15-1\6 meeting if upcoming inflation data continue to show moderation. He also left open the possibility of a rate increase if price pressures strengthen.
That message helped pull Treasury yields lower. Reuters reported that the market-implied probability of a September rate increase fell from about 63% to roughly 50% following Waller’s comments. The two-year Treasury yield fell to around 4.33%, while the dollar also weakened.
Lower yields can support Bitcoin because the cryptocurrency is highly sensitive to changes in liquidity and the relative attractiveness of interest-bearing assets. The latest move therefore reflects a combination of monetary-policy repricing and renewed appetite for risk.
The absence of new U.S.-Iran military action also provided some relief to broader markets, reducing one source of short-term geopolitical uncertainty.
Fed outlook gives crypto room
The shift in Fed rate-hike expectations has become the dominant macro factor behind Bitcoin’s rebound. Investors had previously raised expectations for a September increase as inflation remained above the Federal Reserve’s 2% target and Treasury yields climbed.
Waller’s comments changed the balance by tying his decision directly to incoming inflation data. The August inflation report, due before the September policy meeting, will therefore be important for both bond and cryptocurrency markets.
Bitcoin had been particularly vulnerable to higher yields during its late-August pullback. The latest decline in borrowing-cost expectations has allowed buyers to return, helping BTC recover from levels near $77,000.
The weekly performance is now positive:
- Bitcoin: Up about 4.2% Friday
- Intraday peak: Above $82,000
- September Fed hike odds: About 50%
- Two-year Treasury yield: Around 4.33%
The rally has also spread across cryptocurrency-related equities. Strategy, one of the largest corporate holders of Bitcoin, gained nearly 18% on Thursday, highlighting the broader response to the change in macro conditions.
However, the move remains dependent on the next inflation and employment readings. A strong inflation report could quickly restore expectations for tighter policy, pushing yields higher and potentially limiting Bitcoin’s recovery.
Regulation adds another support
Bitcoin is also benefiting from expectations of greater clarity in U.S. crypto regulation. Securities and Exchange Commission Chairman Paul Atkins said he expects the Senate to vote on the Clarity Act on September 15 and urged lawmakers to advance the legislation.
The bill is being closely followed by digital-asset companies because it seeks to clarify the regulatory treatment of cryptocurrencies and establish a clearer division of authority between U.S. financial regulators. The SEC has separately been developing its own crypto-market rules.
The regulatory story matters because uncertainty over whether digital assets should be treated as securities, commodities or another category has complicated product development and institutional participation.
The current shift does not mean the Clarity Act is guaranteed to become law. Congressional disagreements have delayed the legislation, including disputes over provisions concerning stablecoin rewards and restrictions related to lawmakers’ crypto trading.
Still, the prospect of clearer rules has improved sentiment across the market. Ethereum rose more than 5% to around $2,522, while XRP gained about 6.6% and Solana advanced nearly 3.9%. Cardano was among the strongest major tokens, rising roughly 8%.
Bitcoin now faces a different test from the one that dominated the first half of the week. Instead of defending the $77,000 area, traders are watching whether BTC can remain above $80,000 and challenge the recent high above $82,000.
A sustained move higher would strengthen the recovery, while a failure to hold above $80,000 would suggest that the rally remains vulnerable to another pullback if yields or the dollar turn higher.
Conclusion
Bitcoin’s move above $81,000 reflects two important changes in the market: lower expectations for an immediate Federal Reserve rate hike and growing optimism over U.S. crypto regulation. Waller’s comments reduced September hike odds to roughly 50%, while Paul Atkins’ support for the Clarity Act added another positive policy signal. Bitcoin’s next test is whether it can hold above $80,000 and challenge $82,000 again. The outlook remains dependent on August inflation data, Treasury yields, Fed policy and progress on U.S. crypto legislation.
Sources & Methodology
Primary-source standard: Market-moving facts should link to original data releases, regulator notices, company filings or official project announcements whenever available. Secondary reporting is used for additional context, not as a substitute for original evidence.
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