Bitcoin rebounded above $79,000 on Wednesday, recovering from a Tuesday slide as fresh inflows into Grayscale's Zcash ETF lifted sentiment across crypto markets. Gains stayed capped, though, as traders raised bets on a Federal Reserve rate hike this month and oil prices surged toward $100 a barrel.
Renewed interest in crypto exchange-traded products lifted Bitcoin on Wednesday, offsetting concerns over a possible Federal Reserve rate hike and surging oil prices. Still, the advance stayed limited as macroeconomic risks weighed on the broader market.
Bitcoin claws back from Tuesday's slide
The world's largest cryptocurrency last traded 1% higher at $79,111.2 by 02:15 ET (06:15 GMT), after falling to lows near $77,600 on Tuesday. It had climbed above $82,000 last week before stronger-than-expected U.S. jobs data triggered a reversal.
Zcash ETF inflows fuel the rebound
The broader crypto market is also watching a rally in Zcash, with assets in Grayscale's Zcash ETF topping $500 million roughly two weeks after its Aug. 25 debut on NYSE Arca. Grayscale's fund is the first exchange-traded product offering spot exposure to Zcash, expanding institutional access to the token.
Fed rate-hike bets and an oil surge cap gains
Traders have sharply increased bets that the Fed could raise rates at its Sept. 15-16 meeting after stronger-than-expected employment data and renewed inflation concerns. UBS on Monday forecast two 25-basis-point Fed rate hikes this year, in September and December, while markets priced roughly a 58% probability of a September increase.
Brent crude climbed to $99.68 a barrel on Wednesday, its highest level since late June, as escalating Middle East tensions raised fears of a wider disruption to energy supplies. The oil surge has complicated the outlook for central banks by raising the prospect of renewed inflation just as policymakers weigh whether conditions warrant tighter policy.
U.S. producer prices are due Thursday, followed by consumer price data on Friday, key inputs for the Fed's next move. For Bitcoin, higher interest rates would likely weigh on demand for risk-sensitive assets by increasing the relative appeal of yield-bearing investments, keeping the token below its recent highs despite continued ETF interest.
Altcoins broadly higher
Most altcoins rose Wednesday alongside Bitcoin's rebound. Ethereum rose 1.2% to $2,499.37. XRP also jumped, gaining 3.5% to $1.43.
Solana and Cardano each added 1.5%. BNB edged up 0.7%, and Dogecoin gained 1.1%.
Source: Cryptocurrency News
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