Bitcoin's $81k Breakout Fizzles Amid Fed Interest Rate Fears
Bitcoin's surge to over US$81,000 fizzled out as Federal Reserve Chair Kevin Warsh reaffirmed the central bank's commitment to bringing inflation back down to its 2% target.
The world's largest cryptocurrency had rallied more than 20% in just over a week, driven by renewed institutional buying and a broader shift towards alternative assets. However, this momentum was short-lived as Warsh's comments at Jackson Hole sent the market into a tailspin.
Bitcoin's price dipped below US$78,000 after Warsh's speech, with traders increasing bets that the Federal Reserve could raise interest rates at its September meeting. This development presented a headwind for cryptocurrencies and other risk assets, as higher interest rates increase the returns available from cash and government bonds.
Despite this setback, institutional demand remains strong. US spot Bitcoin exchange-traded funds recorded eight consecutive sessions of net inflows totalling around US$2.8 billion, with August inflows exceeding US$3 billion, making it the strongest month so far in 2026.