Bitcoin surged nearly 2% to reclaim the $107,000 level, marking a strong recovery from weekend lows after a tentative ceasefire agreement between Iran and Israel calmed investor nerves. The rebound in crypto markets came despite continued caution from the U.S. Federal Reserve, with Chair Jerome Powell maintaining a neutral stance on interest rate policy.
Ceasefire Triggers Relief Rally
Geopolitical tensions had rattled the markets earlier this week, with Bitcoin dropping below $100,000 after military exchanges between Iran and Israel. However, news of an apparent Middle East truce on Wednesday boosted sentiment, sparking a broad crypto market recovery.
The total crypto market capitalization bounced back to $3.4 trillion, while Ether and Solana posted modest gains. The GMCI 30 Index, tracking the top 30 cryptocurrencies, also reflected this bullish shift.
Fed Maintains Cautious Tone, Markets Look Ahead
Despite hopes for policy easing, Fed Chair Jerome Powell signaled no immediate interest rate cuts, pointing to tariff uncertainties and the need for more inflation data before any move. Speaking before Congress, Powell stated the economy and labor market remain firm, reinforcing expectations that the first rate cut may come in December, not September.
Analysts, including Timothy Misir of BRN, now expect a 50 basis point rate cut at year-end, following key CPI reports in September and October.
Institutional and Government Demand Remains Strong
Even in the absence of a dovish Fed pivot, institutional appetite for Bitcoin remains high:
- U.S. spot Bitcoin ETFs saw $588.5 million in inflows on June 24
- Ether funds attracted $71 million, pushing cumulative inflows above $4 billion, according to SoSoValue
At the state level, Arizona, Ohio, and Texas are progressing with plans to allocate public funds to Bitcoin, while Japan’s Metaplanet raised $514 million for BTC investment through stock issuance.
Outlook: Structural Demand May Outweigh Macro Risks
According to BRN’s Misir, the structural demand from corporations, governments, and ETFs is proving resilient against geopolitical shocks and Fed uncertainty.
“With institutional demand surging despite the absence of Fed support, we maintain heavy exposure,” he noted. “The drivers for long-term growth remain intact.”
Disclaimer
This content is for informational purposes only and does not constitute financial, investment, or legal advice. Cryptocurrency trading involves risk and may result in financial loss.