Bitcoin Rallies Above $81,000 on $101 Million ETF Inflows and $440 Million Short Liquidations

Bitcoin opened at $81,271.92 on September 4, up 5.1 percent from Thursday's opening price, as dovish comments from Fed Governor Christopher Waller triggered more than $440 million in crypto short liquidations and drove BTC rapidly above $80,000, according to Yahoo Finance and KuCoin. As of 7:21 a.m. Eastern Time, Bitcoin traded at $81,240.29. Ethereum opened at $2,507.70, up 4.9 percent, and traded at $2,522.14 at the same time. The rally was driven by a repricing of Fed rate expectations and short covering after Waller said September 3 he would support keeping rates unchanged if August inflation data continues to improve. Market pricing for a 25-basis-point September rate hike fell from around 63 percent to roughly 50 percent, the U.S. 10-year Treasury yield declined to 4.76 percent, and the dollar weakened. Spot liquidity also improved at the margin, with U.S. spot Bitcoin ETFs recording net inflows of around $101 million after $236 million in net outflows the previous day. The 30-day average net flow of stablecoins onto exchanges turned positive after 113 consecutive days of outflows. Crypto-related equities significantly outperformed the broader market, with Strategy up 17.6 percent, Robinhood 16.3 percent, Circle 15.9 percent, and Coinbase 10.1 percent on September 3. The total cryptocurrency market capitalization rose more than 5 percent to $2.82 trillion. However, the stronger-than-expected August jobs report released later on September 4 — showing 162,000 new payrolls against consensus of 55,000 — may reverse some of the rate-repricing gains as markets again weigh the likelihood of a September Fed hike.