Fed Chair comments push Bitcoin back above $60,000

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Fed Chair comments push Bitcoin

How the rest of the market reacted

Among major cryptocurrencies, Solana led the move. The token rose by about 4% on the day to around $78 and gained roughly 16% over the week. It was the only major asset to show a meaningful weekly increase. Ether traded near $1,630, adding about 3% on the day, while XRP held around $1.06. BNB, Dogecoin and Tron looked weaker over the week.

The stronger move came in the stock market. A sell-off in semiconductor stocks spread to South Korea on Thursday, where the Kospi index fell almost 7% before partially recovering. Samsung Electronics and SK Hynix stocks declined by more than 6%, while Japan’s Kioxia dropped 13% after a rally that had lifted the stock by more than 650% since the start of the year.

The decline once again fueled concerns that the rapid rise in stocks linked to artificial intelligence had moved too far away from reality.

Two reports added to the nervousness. Bloomberg wrote that Meta is building a cloud business to sell access to excess AI computing capacity. This raised concerns that the company may have built too much infrastructure. In addition, Apple is in talks to buy chips from two Chinese semiconductor makers, a move that could hurt Korean suppliers.

Capital had been flowing actively into the AI sector throughout the quarter while Bitcoin was falling. As a result, the asset ended the first half of the year in negative territory and posted a rare back-to-back quarterly decline, only the third such case in its history. Money had been moving into chipmakers and AI infrastructure, so cracks in that sector could ease pressure on the crypto market.

In commodities, Brent crude fell to around $70.60 per barrel, its lowest level since late February, before the start of the war in the Middle East. Oil came under pressure after traffic through the Strait of Hormuz recovered.

Gold rose for a second day and traded above $4,060 per ounce after Warsh’s comments. The dollar stabilized after two days of gains.

Why Bitcoin reacts to the Fed

Bitcoin reacts to statements from the Fed chair because expectations around interest rates, inflation and liquidity are crucial for the crypto market. When investors hear signals that inflation risks are easing, they start pricing in a softer regulatory policy in the future. This could mean lower rates, cheaper money and stronger appetite for risk. In such an environment, demand for risk assets, including Bitcoin, usually increases.

At the same time, Bitcoin has long traded not only as a separate crypto asset but also as part of the global risk market. Its performance depends on where capital is moving: into defensive instruments, the dollar and bonds, or, on the contrary, into technology stocks, cryptocurrencies and other more volatile assets. That is why even cautious comments from the Fed chair can quickly change trader sentiment and trigger a price reversal, especially if the market had been under pressure for several weeks before that.

As a reminder, Bitcoin was trading below $59,000 just yesterday amid outflows from Bitcoin ETFs.

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