Bitcoin Reclaims $81,000, Zcash Grows +15.6%

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Bitcoin has recovered its recent losses. During Asian trading hours on Friday, the largest cryptocurrency changed hands at around $81,000, up roughly four percent over 24 hours. Only days ago the price had slipped below the $78,000 mark after Fed Chair Kevin Warsh signaled that a rate increase was on the table.

The Rates Market Did the Work

The rebound was driven by a repricing of U.S. monetary policy. Fed Governor Christopher Waller indicated he would support holding rates steady if price pressures continue to ease. The probability of a rate increase this month, as priced in by the CME FedWatch tool, fell from above 63 percent to roughly even, according to CoinDesk. Bond yields eased, buyers moved back into risk assets, and gold as well as global equity indices advanced alongside crypto.

A second factor came out of Japan. The yen strengthened by about two percent, erasing a month of gradual decline in a single session. A stronger yen typically drains liquidity from the carry trades that help fund positions in risk assets, including crypto. This time bitcoin absorbed the move without giving back its gains.

Sentiment Gauge Jumps Into Extreme Greed