Digital Assets Rally as Fed Resumes Rate Increases After Three-Year Pause

Bitcoin climbed 0.88% over the past 24 hours to $76,621 as traders reacted to the Federal Reserve’s projections suggesting that just one additional rate hike may follow. Zcash outpaced the market with a 23% surge to a record high after Paradigm disclosed its investment in the privacy token.

Bitcoin touched $76,621 on Thursday, marking a 0.60% increase since midnight UTC and a 0.88% gain over 24 hours. The move came as investors placed greater emphasis on the Fed’s future rate projections than on its first rate increase in more than three years. Ether rose 1.1% to $2,444.36, while Solana gained 2% to $100.57.

The Federal Open Market Committee raised its benchmark target by 25 basis points to 3.75%-4%. Fed Chair Kevin Warsh said inflation had remained “too high … for too long,” while recent readings had failed to show a significant improvement in underlying inflation.

The Fed’s latest “dot plot” helped ease concerns over an extended tightening cycle. The median projection sees the policy rate at 4.1% at the end of both 2026 and 2027, implying only one more 25-basis-point increase.

The broader risk market also advanced. The Dollar Index fell 0.17%, while Nasdaq 100 futures climbed 1.04% and S&P 500 futures gained 0.81%. Gold rose 1.02% and silver increased 1.52%. The two-year Treasury yield dropped 2 basis points to 4.71% after reaching its highest point since 2024 during the prior session.

Crypto assets moved higher alongside other risk assets rather than leading the rally. That represented a shift from earlier in the week, when cryptocurrencies had moved more independently from equities. Gains were widespread, with speculative tokens showing particularly strong momentum. Ninety-four of the CoinDesk 100 constituents advanced over 24 hours, while the small-cap CoinDesk 80 rose 4.7%, compared with a 1.2% increase in the bitcoin-heavy CoinDesk 5.

ETF flows, however, remained negative. U.S. spot bitcoin ETFs recorded $295.98 million in outflows Wednesday, following $450.33 million in withdrawals the previous day, according to SoSoValue. Cumulative outflows since Sept. 8 have exceeded $1 billion across seven sessions, bringing total net assets down to $95.19 billion.

Bitcoin remains 6.9% below its Sept. 4 monthly peak of $82,284.

Derivatives Positioning

Aggregate open interest in crypto futures increased to $64.4 billion from $59.7 billion on Monday. Twenty-four-hour volume stood at $112.6 billion, while liquidations totaled $214.3 million, according to Coinalyze. The increase in open interest indicates traders have been establishing additional positions during the recovery instead of simply covering short positions.

Bitcoin open interest increased 1.41% to $26.6 billion, while ether open interest rose 1.39% to $16.7 billion. Liquidations in ether reached $60.7 million, compared with $42.4 million for Bitcoin.

Zcash experienced the largest jump in derivatives positioning. ZEC open interest surged 37.84% to $2.2 billion over 24 hours, while $28.9 million was liquidated. The funding rate remained negative at -0.0253%, meaning short sellers were paying long holders even as ZEC reached fresh records. Traders have repeatedly bet against the token’s rally this month, resulting in ongoing short squeezes.

Bitcoin’s funding rate remained positive and moved higher. The aggregate rate reached 0.0070%, with the predicted rate at 0.0082%. Exchange-level rates ranged from 0.0153% on Kraken to -0.0003% on Huobi.

The Coinalyze long/short ratio stood at 1.13, indicating a greater concentration of bullish positions. The ratio has remained above 1 for eight consecutive days after spending three weeks in negative territory.

Token Market

Zcash rose 23% over 24 hours to approximately $1,369, establishing a new record high. The rally followed Paradigm co-founder Matt Huang’s disclosure on X that the investment firm owns ZEC. Huang referred to Zcash as “a private complement to Bitcoin” and supported continued funding for its development team.

The move followed a governance vote in which Zcash holders approved reducing block times from 75 seconds to 25 seconds while maintaining the cryptocurrency’s Bitcoin-style halving schedule. Zcash’s market capitalization now stands at $23.2 billion.

Monero moved lower despite the strength in Zcash. XMR declined 0.97% to $494.14 and was down 1.6% over 24 hours. Zcash’s market capitalization has now reached twice the value of Monero.

NEAR Protocol gained 16% over 24 hours to $2.82, including a 7.6% rise since midnight UTC, making it the leading mid-cap performer. Venice Token advanced 14% to $25.45, returning above its level before Tuesday’s Clarity Act vote.

Pump.fun topped the CoinDesk 80 with a 7.9% gain to $0.003926. Lighter (LIT) rose 7% to $4.92, while Fartcoin added 6.4%. The gains indicate that speculative trading activity is picking up again after market attention had shifted toward Bitcoin following the August short squeeze.

CoinMarketCap’s “Altcoin Season” indicator climbed to 39/100 from roughly 32/100 for much of the week.