Bitcoin has made headlines once again, climbing back above $91,000 with an impressive 8% increase in just 24 hours. This resurgence follows significant policy changes from major financial institutions, paired with heightened expectations of a Federal Reserve rate cut, creating a ripple of optimism in the cryptocurrency market.
In a broader look at the stock market, futures indicated gains for the Dow Jones Industrial Average, S&P 500, and Nasdaq 100, all up by about 0.2% as traders anticipate the upcoming ADP private payrolls report scheduled for Wednesday at 8:15 a.m. ET. This economic data becomes particularly crucial as it arrives in the wake of the government shutdown, which has delayed other critical reports.
Your average onlookers might have seen tech stocks contributing to the market’s uplift, with companies like Nvidia bolstering investor confidence ahead of the deeply awaited Fed policy decision on December 10.
On the cryptocurrency front, aside from Bitcoin’s spectacular rebound, Ethereum also soared, reclaiming the $3,000 threshold after a notable 10% jump. Overall, the total cryptocurrency market capitalization surged to $3.06 trillion, bouncing back after dipping below this important mental level during a sell-off on Sunday.
One of the most talked-about catalysts for Bitcoin’s jump was Vanguard lifting its longstanding ban on purchasing Bitcoin ETFs. This shift, effective immediately, has contributed to the current bullish sentiment. “The Vanguard Effect” was palpable, as Bitcoin surged over 6% around the U.S. market open, according to Bloomberg Intelligence analyst Eric Balchunas, who remarked on social media how trades were notably brisk.
In a rapid move for the crypto space, BlackRock’s IBIT ETF recorded a staggering $1 billion in trading volume within just the first 30 minutes of trading. Meanwhile, Bank of America has now granted its advisers the green light to recommend crypto allocations of 1-4% to clients, effectively loosening previously instituted restrictions for over 15,000 advisers across its platforms.
This wave of policy changes represents a significant evolution within one of the largest U.S. brokerages, indicating a growing acceptance of digital assets among traditional financial giants. As more conventional institutions open their doors to crypto investments, the overall investment landscape appears to be shifting.
A combination of trader sentiment and economic forecasts is powering the markets. Current evaluations via the CME FedWatch tool suggest an 87.2% likelihood of the Federal Reserve implementing a 25-basis point rate cut at their upcoming meeting, a leap from a 63% chance noted just one month prior. This anticipation signals a broader risk appetite across various asset classes, leading to significant upticks in both traditional and crypto markets.
In addition to Bitcoin and Ethereum, other altcoins have also benefited from the positive sentiment. Cardano rose approximately 14.5%, while Solana climbed by 11%, showcasing a wider trend of recovery in digital assets. Chainlink jumped more than 12%, bolstered by the launch of a new Chainlink ETF on the NYSE Arca, marking a significant milestone for its investors.
As stocks and crypto assets commence a week filled with pivotal economic indicators and policy announcements, U.S. investors remain on alert. All eyes will undoubtedly be on the Federal Reserve, as the market navigates this new terrain paved with opportunities and potential pitfalls.
