Bitcoin Rebounds Above $78,000 as DeFi and Layer-2 Tokens Lead Post-Fed Recovery

Bitcoin climbed back above $78,000 on Friday as a wave of buying in decentralized finance and layer-2 tokens signaled that traders were moving past the inflation scare triggered by the Federal Reserve's first rate increase in three years.

The world's largest cryptocurrency added roughly 2% over the past 24 hours, recovering from a midweek slide that had briefly pushed prices below $75,000. The rebound came as the 10-year Treasury yield slipped back under 5% and Brent crude retreated below $103 a barrel, easing concerns that the central bank's hawkish turn would force a prolonged sell-off across risk assets.

DeFi and layer-2 tokens posted the sharpest gains, with Starknet (STRK) up 18%, Arbitrum (ARB) advancing 17%, and Uniswap (UNI) rising 13%, according to data from CoinDesk. The DeFi Select Index surged 8.3% since midnight UTC, while Solana (SOL) added 4.5% to $106.14.

The rotation into speculative corners of the crypto market marked a notable shift from Thursday, when privacy and haven assets led gains. CoinMarketCap's Altcoin Season index climbed to 44 out of 100, up from a Tuesday low of 32, underscoring the renewed appetite for risk.

The Fed's Hawkish Turn

The Federal Reserve raised its benchmark rate by 25 basis points to a range of 3.75% to 4.00% on Wednesday, the first increase in about three years. Chair Kevin Warsh reiterated that curbing inflation remains the central bank's top priority, and projections showed 16 of 18 officials expect at least one more hike before the end of 2026.