Bitcoin Recovers $81K Level as Rate-Hike Odds Drop, Zcash Outperforms

Bitcoin climbed above $81,000 on Friday as traders sharply lowered their expectations for a Federal Reserve rate hike this month, sparking gains across the wider cryptocurrency market.

BTC was trading above $81,000 during Asian morning hours, up approximately 4% over the previous 24 hours. The move came as the probability of a September Fed rate increase fell to around 50%, down from more than 63% earlier in the week, according to the CME FedWatch tool.

The softer outlook for monetary tightening pushed Treasury yields lower and encouraged investors to return to riskier assets.

Fed Governor Christopher Waller contributed to the shift in sentiment, saying he would favor keeping interest rates unchanged if inflation pressures continued to ease. Treasuries and gold also held onto the gains posted during the New York session.

Zcash Leads the Market Higher

Zcash delivered the strongest performance among major cryptocurrencies, surging nearly 15% over 24 hours and about 20% for the week. The rally has allowed the token to significantly outperform most of its large-cap peers.

Hyperliquid’s HYPE advanced roughly 6%, while XRP gained close to 6%. Ether, BNB and dogecoin each added between 4% and 5%.

Solana rose nearly 3%, while TRON posted a gain of slightly more than 1%, the smallest advance among the major tokens.

The seven-day performance was considerably more subdued. Bitcoin was up around 1%, while ether and XRP were nearly unchanged. Solana and TRON were each down almost 3%, according to CoinDesk data.

Bitcoin ETFs Have Yet to Show Sustained Demand

U.S. spot Bitcoin ETFs registered about $277 million in net inflows on Thursday, based on preliminary figures. The inflow followed four trading sessions that alternated between positive and negative flows.

Although the latest figure points to renewed buying, the ETFs have not yet recorded a sustained run of inflows. Continued positive flows would provide a stronger indication that institutional investors are increasing exposure rather than simply taking advantage of a short-term rebound.

Traditional markets also extended their gains. MSCI’s Asia Pacific index rose nearly 1%, while the All Country World Index advanced for a third consecutive day.

The dollar stabilized after reaching its weakest level since May, while an Asian currency index climbed to its highest level since October 2024.

Yen Rally Raises Liquidity Questions

The Japanese yen remained under scrutiny after gaining roughly 2% on Thursday, reversing about a month of gradual declines. Investors increased their expectations for Bank of Japan rate hikes and continued watching for potential intervention by Japanese officials.

The yen subsequently gave back some of its gains, trading near 156.35 per dollar after reaching 155.30 in the previous session.

A stronger yen can squeeze carry trades, which are often used to finance investments in riskier assets. Bitcoin’s ability to maintain its gains despite the yen’s sharp move suggests that risk appetite remains relatively resilient.

ETF activity in the final trading sessions of the week will be closely watched. Persistent inflows could strengthen the argument that the latest rally reflects a broader shift in market positioning rather than a temporary response to changing rate expectations.