Bitcoin soared towards $114,000 as broad markets rallied after the US Federal Reserve president proposed a new type of “settlement account” with central banks.
Today, October 21st, the crypto market has seen a sharp rise, with most of the top 10 assets gaining 2-4% in the past 24 hours. Bitcoin (BTC) has soared from around $108,560 to nearly $114,000 in the past two hours, an increase of 5.5%.
Markets rallied after Federal Reserve Board member Christopher Waller spoke positively about cryptocurrencies and the “DeFi industry” in his opening remarks at the Fed’s first Payments Innovation Conference today. The conference was established to focus on integrating blockchain and cryptocurrencies into mainstream finance, Waller said.
“I wanted to send a message that this is a new era in payments for the Fed. The DEFI industry is not viewed with suspicion or disdain,” the Fed president said.
Waller also revealed that he is proposing a new type of account to the central bank, which he calls a “payment account.” The new type of account, which Waller said he asked the Fed to consider, would give businesses easier access to the central bank’s payment rails without having a full master account.
Meanwhile, as BTC rose, other large-cap stocks followed suit, with Ethereum (ETH) soaring 3% on the day to $4,101. Dogecoin (DOGE), Solana (SOL), Tron (TRX), BNB, and XRP all also rose between 1% and 4%, reversing the market decline from earlier today.
Sentiment remains cautious amid volatility
Analysts at Glassnode suggested in yesterday’s XPost that sentiment towards Bitcoin investors “remains cautious and positioning remains defensive” amid continued market volatility. “Capital inflows remain strong, but fundamentals are fading and profitability is under pressure. This divergence reflects the market’s torn between confidence and caution following last week’s flashes,” the analysts added in a follow-up post.
Emir Ibrahim, an analyst at digital asset trading firm ZeroCap, suggested in a commentary for The Defiant that despite the volatility, “the structure remains intact and BTC is less than 15% from its all-time high.” Ibrahim added: “The bulls have effectively defended the USD 100,000 zone and with the positioning flushed, there is scope for further upside if macro tailwinds reappear.”
Top gainers and losers
Among the top 100 crypto assets by market capitalization, ChainOpera AI (COAI) and Zcash (ZEC) recorded the largest daily gains. COAI has soared over 66% and ZEC is up 15% and trading at around $295.
Meanwhile, today’s biggest losers among the top 100 stocks were Pax Gold (PAXG) and Tether Gold (XAUT), both down 5.3% as the gold price hit a low of $4,151 an ounce, a decline of more than 5% on the day and the biggest intraday decline in gold since 2021.
ETFs, clearing, macro conditions
More than $528 million in leveraged positions were liquidated in the past 24 hours, resulting in $288 million in shorts, according to Coinglass data. BTC led the wipeout with over $224 million liquidated, followed by ETH with $138 million and other altcoins with over $35 million liquidated.
Fund outflows continue on the virtual currency exchange-traded fund (ETF) side. According to SoSoValue, on Monday, October 20th, the Spot Ethereum ETF saw net outflows of $145.6 million, bringing the total amount managed by Wall Street firms to $26.8 billion. The Spot Bitcoin ETF recorded net outflows of over $40 million over the same period, and its total net assets are now below $150 billion.
On the macro front, Reuters reported that markets expect the US central bank to cut the benchmark interest rate by a quarter of a percentage point at its policy meeting on October 28-29, to a range of 3.75% to 4%.
U.S. Treasury yields fell on Tuesday as investors closely monitored the ongoing government shutdown and grew more optimistic about a possible resolution, CNBC reported.
Although the release of official jobs numbers remains on hold due to the shutdown, White House economic adviser Kevin Hassett said Monday that the standoff is “likely to end this week” and warned that if the standoff continues, the Trump administration could resort to “more forceful measures” to force Democrats to cooperate, Hassett told CNBC’s “Squawk Box.”