Bitcoin Nears $64K as BTC Futures Attract Billions; BoJ’s Hike Pause Bumps Risk Assets

Bitcoin (BTC) extended one-week gains to 10% after a busy few days, including rate cuts by the U.S. Federal Reserve, a pause in cuts by the Bank of England, and a decision to hold rates by the Bank of Japan (BoJ) on Friday.

BTC briefly crossed $64,000 in Asian morning hours Friday, before paring gains, as BoJ kept policy unchanged in a move that avoided a repeat of July’s market meltdown which followed its decision to hike rates.

Traders said macroeconomic data suggests optimism for riskier bets, such as bitcoin, in the coming months. “The US 2Y/10Y treasury spread, an indicator of recession, has been inverted since July 2022 but has recently steepened to +8bps,” QCP Capital traders said in a market broadcast Friday. “This reflects market optimism and a shift towards risk-on assets.”

Short-term debt instruments with higher yields than long-term ones can be a warning sign for risk assets and the economy – as it indicates that monetary and fiscal policies are restrictive and that the economy may contract in the future.

Open interest data fromCoinGlass show a nearly $5 billion jump in bitcoin bets since Tuesday, a sign of new money rapidly entering the market in expectations of volatility ahead. Traders are biased toward longs – or bets on higher prices – a ratio tracking the active buying volume to active selling volume shows.

Crypto markets jumped higher in the past 24 hours, with memes and layer-1 tokens leading gains. Solana’s SOL and ether (ETH) zoomed as much as 7% to lead major gains, while Avalanche’s AVAX, Aptos’ APT, and Immutable’s IMX jumped as much as 12%.

Memecoins led by bonk (BONK) surged as much as 10%, CoinGecko data shows, showing a return of risk-on behavior.

The broad-based CoinDesk 20 (CD20), a liquid fund tracking the largest tokens by market capitalization, rose 3.5%.