CoinShares Says Fed Policy Still Caps Bitcoin Near $80,000

Crypto fund flows are becoming more sensitive to the U.S. interest-rate outlook, with CoinShares saying Federal Reserve policy remains a key barrier to Bitcoin breaking above $80,000 despite continued investor demand for crypto. According to Cointelegraph, CoinShares head of research James Butterfill said Bitcoin is trading like gold again, but the Fed still sets the ceiling at around $80,000. The sensitivity was visible after Fed Chair Kevin Warsh’s speech at Jackson Hole, when he said progress on inflation had been modest and that price pressures were not easing quickly enough to give policymakers confidence that inflation was returning to the 2% target. Roughly $100 million exited digital asset investment products immediately after the speech as markets sharply increased the probability of a September rate hike. Flows then reversed over the following week, reaching $1 billion by Sept. 4, after Fed Governor Christopher Waller pointed to recent signs of disinflation and said he was inclined to keep rates steady in September if upcoming inflation data showed further progress. Butterfill wrote that investors are not exiting the asset class, but are trading the rate path. As of Monday, Fed Funds futures prices implied a roughly 60% chance of a rate hike following next week’s Federal Open Market Committee meeting, according to CME Group. Markets are now pricing in a 25 basis-point rate hike on Sept. 16. The moves suggest Bitcoin and broader digital asset markets remain highly sensitive to shifts in liquidity and monetary policy, while easier financial conditions have historically supported crypto and other risk assets. CoinShares’ assessment also comes after a strong rebound in Bitcoin and the broader digital asset market last month, when the U.S. Treasury announced plans to double certain long-dated bond buybacks from $2 billion to $4 billion per operation. Bitcoin climbed from the low $60,000s to above $80,000 during the month. The expanded buyback program is expected to run from Sept. 9 through Nov. 4. In her Substack newsletter last week, 21shares co-founder Ophelia Snyder said the Treasury announcement, equity sell-offs, yield-curve shifts, and ongoing noise from the Iran war all pointed to a rally driven less by crypto-specific catalysts and more by growing interest in de-risking exposure to the U.S. specifically. The market’s focus on liquidity conditions also led Standard Chartered to forecast that Bitcoin could reach $100,000 before the end of the year.