The crypto market witnessed a robust surge on Friday, as Bitcoin and ether climbed strongly in response to significant developments in international financial markets. Bitcoin recently breached the $87,000 mark during Asian trading hours, while ether also experienced substantial gains, reinforced by a broad-based rally across various tokens.
The catalyst for this movement was twofold. The Bank of Japan (BOJ) announced it would raise its benchmark interest rate to its highest level in 30 years, an expected move that Governor Kazuo Ueda had hinted at leading up to the decision. Notably, Japan’s 10-year government bond yield made headlines by briefly hitting 2% for the first time since 2006, a key indicator of changing economic conditions.
Bonnie’s market reaction was mostly positive. Asian stocks rallied, with the MSCI Asia Pacific Index climbing 0.7%, primarily driven by technology shares. Alongside this, major cryptocurrencies like Cardano’s ADA, Solana’s SOL, Dogecoin, BNB, and XRP joined the bullish trend, each gaining up to 3%. The CoinDesk 20 index similarly reported a 2% increase on the day.
However, the road to this rally was not without turbulence. The preceding 24 hours were marked by significant market volatility, leading to over $576 million in liquidations, as traders exited leveraged positions amidst the uncertainties.
The positive sentiment extended into U.S. markets, where the Nasdaq Composite soared by 1.4%. The S&P 500 followed closely with a 0.8% rise, and even the Dow Jones Industrial Average managed a modest increase of 0.2% throughout Thursday’s sessions.
Tech Sector Boosted by Strong Micron Earnings
The technology sector, in particular, gained momentum from Micron Technology’s quarterly earnings report. Beating expectations, Micron projected that its adjusted profit for the next quarter would be nearly double what analysts had forecasted, resulting in a 10% jump in their stock. The report helped alleviate concerns regarding artificial intelligence spending, which had been weighing on tech stocks earlier in the week.
Mirroring these positive corporate sentiments, the November Consumer Price Index (CPI) data revealed a reassuring inflation rate of 2.7% year-over-year, falling short of the anticipated 3%. With core inflation recorded at 2.6%, again below expectations, this data shifted market expectations regarding Federal Reserve monetary policy.
Inflation in the US just unexpectedly posted one of the largest monthly declines since 2023…
This puts Core CPI inflation in the US at its lowest level… pic.twitter.com/gjiWID9ZdL
— The Kobeissi Letter (@KobeissiLetter) December 18, 2025
As a result, investors are now more optimistic about the possibility of the Federal Reserve cutting interest rates in the coming months. This shift comes in light of Fed Governor Chris Waller’s previous signals of support for potential rate cuts.
Initial jobless claims for the week ending December 13 came in at 224,000, marking a decrease from the prior week. However, fluctuations in the job market data have continued, attributed to the ongoing impacts of the federal government shutdown.
On-chain metrics indicate notable behavioral shifts among Bitcoin holders, with long-term holders appearing to wrap up an extended selling phase, according to K33 Research findings. Approximately 20% of Bitcoin’s supply has re-entered the market over the past two years.
As futures tied to U.S. equities extended their overnight rebound, investors cautiously embraced the dual factors of the BOJ’s rate hike and the stabilization of inflation. Markets remain vigilant as the year-end approaches, a period typically characterized by thinner liquidity and ongoing high leverage use within the crypto sphere.
Additionally, the Trump Media & Technology Group announced a noteworthy $6 billion merger deal with Tae Technologies, a fusion power firm backed by Alphabet and Chevron. This development drew investor interest, spurring a notable rise in Trump Media’s share price as speculation about AI-driven energy demand gained traction.
