BTC Jumps 5% as Fed Signals ‘New Era’ for Crypto

Crypto markets are seeing a sharp uptick today, Oct. 21, with most of the top 10 assets up between 2-4% in the past 24 hours. Bitcoin (BTC) surged from near $108,560 to almost $114,000 over the past two hours, a 5.5% gain.

Markets rallied sharply after Federal Reserve governor Christopher Waller spoke favorably about the crypto and “defi industry” in his opening remarks at the Fed’s first Payments Innovation Conference, which is taking place today. The conference was created to focus on the integration of blockchain and crypto into mainstream finance, Waller noted.

“I wanted to send a message that this is a new era for the Federal Reserve in payments—the defi industry is not viewed with suspicion or scorn,” the Fed governor said.

Waller also revealed that he has proposed a new kind of account with the central bank, which he referred to as a “payment account.” The new type of account, which Waller said he’s asked the Fed to consider, would make it easier for companies to have access to the central bank’s payments rails, without having a full master account.

Meanwhile, as BTC rallied, other large-caps followed, with Ethereum (ETH) up 3% on the day, surging to $4,101. Dogecoin (DOGE), Solana (SOL), TRON (TRX), BNB, and XRP are all also up between 1% and 4%, reversing the market downturn from earlier today.

Sentiment Remains Cautious amid Volatility

Analysts at Glassnode suggested in an X post yesterday that sentiment around Bitcoin investors “remains cautious and positioning is still defensive” amid ongoing market volatility. “Capital inflows remain strong, but fundamentals are fading and profitability is under pressure. This divergence reflects a market caught between conviction and caution following last week’s flush,” the analysts added in a follow-up post.

In commentary to The Defiant, Emir Ibrahim, analyst at digital asset trading firm Zerocap, suggested that despite the volatility, “structure remains intact, and BTC sits less than 15% off all-time highs.” Ibrahim added: “Bulls defended the US$100k zone effectively, and with positioning flushed, there’s scope for another push higher once macro tailwinds re-emerge.”

Top Gainers and Losers

Within the top-100 crypto assets by market cap, ChainOpera AI (COAI) and Zcash (ZEC) posted the biggest daily gains. COAI jumped over 66%, while ZEC is up 15%, trading around $295.

Meanwhile, today’s biggest losers among the top-100 are Pax Gold (PAXG) and Tether Gold (XAUT) which are both down 5.3% as gold prices hit as low as $4,151 per ounce, marking more than a 5% decline on the day, gold’s biggest intraday drop since 2021.

ETFs, Liquidations and Macro Conditions

In the past 24 hours, over $528 million in leveraged positions were liquidated, with $288 million in shorts, per data from Coinglass. BTC led the wipeout with more than $224 million liquidated, followed by ETH at $138 million and other altcoins with more than $35 million liquidated.

On the crypto exchange-traded fund (ETF) side, outflows continue. On Monday, Oct. 20, spot Ethereum ETFs saw $145.6 million in net outflows, bringing the total amount controlled by Wall Street firms to $26.8 billion, according to SoSoValue. Spot Bitcoin ETFs recorded over $40 million in net outflows over the same timeframe, with total net assets now standing below the $150 billion mark.

On the macro front, markets expect the U.S. central bank to lower its benchmark interest rate by a quarter of a percentage point to the 3.75%-4% range at its Oct. 28-29 policy meeting, Reuters reported.

Treasury yields moved lower on Tuesday, as investors monitored the ongoing government shutdown and grew more optimistic about a potential resolution, CNBC reported.

The release of official employment data remains on hold due to the shutdown, but White House economic advisor Kevin Hassett said on Monday that the standoff is “likely to end sometime this week,” warning that if it continues, the Trump administration may resort to “stronger measures” to force Democratic cooperate, Hassett said on CNBC’s “Squawk Box.”