- Bitcoin jumped above $93,000 after Vanguard reversed its stance on crypto ETFs, boosting investor confidence.
- Expectations of a U.S. rate cut and a major short squeeze further strengthened the rally.
Bitcoin is currently trading above the $93,000 mark, reflecting a 10% increase. The surge is fueled by an unexpected shift from Wall Street’s most conservative giant and rising confidence in upcoming U.S. interest rate decisions.
Vanguard’s Change of Heart Boosts Market Confidence
Vanguard has finally opened the door for its more than 50 million brokerage clients to buy and sell regulated crypto ETFs. This marks a symbolic moment in the institutional adoption journey, as Vanguard joins BlackRock, Fidelity, and Franklin Templeton.
Analysts quickly pointed out the market impact. Bloomberg ETF analyst Eric Balchunas highlighted that Bitcoin jumped 6% shortly after U.S. markets opened on the first day of Vanguard lifting its ETF restrictions. For many investors, this shift signals deepening acceptance of crypto within mainstream finance.
Anticipation Builds Ahead of Expected Fed Rate Cut
Bitcoin’s rally aligns with broader market optimism. Investors now expect the U.S. Federal Reserve to cut interest rates next Wednesday, with the CME FedWatch tool giving an 87% probability of a 0.25% cut. Predictions on Polymarket are even stronger at 94%.
According to Coinbase Singapore’s country director Hassan Ahmed, a rate cut could globally boost risk assets, including crypto. Several senior Fed official have openly supported easing, further strengthening expectations.
Short Squeeze Adds Fuel to the Price Rise
Traders liquidated nearly $419 million in Bitcoin short positions over the past 24 hours, compared to $74 million in longs. This imbalance shows that many traders expected further downside and exited their positions as prices spiked.
Bitcoin ETFs Extend Their Winning Streak
Bitcoin ETFs recorded $59 million in net inflows, marking five consecutive days of investment after a difficult November that saw $3.5 billion in outflows. The renewed buying activity suggests institutional demand is picking up again.
The broader markets reflected similar sentiment, with the tech-heavy Nasdaq 100 climbing almost 1%, pointing to a rising appetite for risk assets.
With Bitcoin up 7% and Ethereum up 9% in the past day, the crypto market appears to be regaining strength, driven by institutional shifts, macroeconomic expectations, and market mechanics that caught traders off guard.
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