Vanguard's Bitcoin ETF U-Turn Spikes Crypto Market Above $3T

The cryptocurrency market has rebounded above $3 trillion as traders responded to surging Federal Reserve rate-cut expectations and increased U.S. ETF activity following Vanguard's decision to lift its long-standing ban on Bitcoin ETF purchases.

Bitcoin climbed back above $91,000, gaining roughly 8% over 24 hours, while Ethereum reclaimed $3,000 after a 10% jump. The recovery followed Sunday night's sell-off that briefly pushed total market capitalization below the $3 trillion threshold.

Vanguard's reversal arrived the same day Bank of America reportedly told advisers across Merrill, Private Bank, and Merrill Edge that clients can now allocate 1% to 4% of portfolios to crypto, ending a restriction that prevented more than 15,000 advisers from proactively recommending digital asset products. Bloomberg Intelligence analyst Eric Balchunas stated Bitcoin's intraday surge lined up almost exactly with the U.S. equity market open, the first session after Vanguard clients regained access to spot Bitcoin ETFs.

Bitwise CEO Hunter Horsley called the confluence of policy shifts a classic bear market tell, noting the second-largest brokerage flipped its policy, yet no one seemed 'fired up'. Bitwise CIO Matt Hougan added that in down markets, positive developments are ignored but not forgotten, and accumulate as potential energy for the next uptrend.