Bitcoin Reclaims $81,000 as Fed Rate Hold Eases Tightening Fears

Bitcoin reclaimed the $81,000 level following the U.S. Federal Reserve's decision to hold its benchmark interest rate steady. Buying interest spread across the broader cryptocurrency market as concerns over further monetary tightening eased. However, the Fed's renewed emphasis on persistent inflation has raised questions about whether the rebound can develop into a sustained rally.

As of 8:10 a.m. on Oct. 29, Bitcoin was trading at 108,940,000 won, or approximately $81,597, on South Korean cryptocurrency exchange Bithumb, up 0.66% from 24 hours earlier. According to global market data provider CoinMarketCap, Bitcoin stood at $81,110, attempting to establish a firm footing above the $81,000 mark. Major altcoins also posted modest gains, with Ethereum rising 0.99%, Solana gaining 1.25% and XRP advancing 0.85%.

The Fed's monetary policy decision was a key driver of improved investor sentiment. At its Federal Open Market Committee (FOMC) meeting on Oct. 28, U.S. local time, the central bank maintained its benchmark interest rate at 3.75%–4.00%, pausing after last month's increase, its first rate hike in three years and two months. Ten of the 12 voting members supported the decision, while Fed Governor Lisa Cook and Cleveland Fed President Beth Hammack dissented in favor of an additional 25-basis-point increase. The Fed said economic activity continued to expand at a solid pace but noted that inflation remained elevated. It indicated that future policy decisions would depend on incoming economic data as it seeks to return inflation to its 2% target.

Expectations of easing geopolitical tensions also supported market sentiment. According to The Wall Street Journal, U.S. Vice President JD Vance reportedly sent a letter to Mohsen Rezaei, secretary-general of Iran's Supreme National Security Council, proposing a resumption of negotiations. The report raised hopes that tensions in the Middle East could ease. Nevertheless, CoinMarketCap's Crypto Fear and Greed Index stood at 46, in neutral territory, down from 54 a week earlier and 70 a month earlier, suggesting that investor sentiment has yet to return to outright optimism. In South Korea, data from Upbit Datalab showed that the total cryptocurrency market capitalization rose 1.07% over 24 hours, while trading value fell 5.87%, indicating that higher prices were not accompanied by stronger trading activity.

Cryptocurrency-focused asset manager Bitwise offered a more bullish long-term outlook for Bitcoin. In its annual report, 2027 Bitcoin Long-Term Capital Market Assumptions, released on Oct. 28, the firm raised its 10-year Bitcoin price target from $1.3 million to $1.6 million. The revision reflected expectations that the global store-of-value and institutional investment markets would grow larger than previously anticipated. Specifically, Bitwise increased its estimate for the global store-of-value market in 2036 from $91 trillion to $110 trillion and its projection for the institutional investment market from $216 trillion to $303 trillion. The higher price target was driven primarily by an expansion in Bitcoin's total addressable market rather than a change in its assumed market share.

Bitwise Chief Investment Officer Matt Hougan estimated that institutional investors allocating 1%–5% of their total assets to Bitcoin could generate approximately $1.5 trillion to $7.4 trillion in new demand. With 95.7% of Bitcoin's maximum supply already in circulation, the asset's limited supply could become an increasingly important factor. Bitwise projected that Bitcoin would generate a compound annual return of 34.3% over the next decade, outperforming other major asset classes. It also lowered its long-term volatility forecast from 32.9% to 27.8%. These projections, however, are based on assumptions including greater institutional adoption and do not guarantee future returns.

Billionaire venture capitalist Tim Draper, meanwhile, outlined a scenario in which Bitcoin could eventually displace the existing financial system. He argued that widespread corporate adoption of Bitcoin payments could weaken confidence in fiat currencies and potentially trigger bank runs. Draper also maintained his forecast that Bitcoin could reach $250,000 within approximately two years, citing the next halving, scheduled for 2028, as a potential catalyst. His comments represent a personal forecast based on broader Bitcoin adoption, rather than evidence of actual bank deposit withdrawals or large-scale capital outflows.

Despite the short-term rebound, uncertainty remains. Fed Chair Kevin Warsh has left the door open to additional rate hikes, citing persistent inflationary pressures. Further increases could raise borrowing costs and make relatively safer assets more attractive, potentially weakening demand for risk assets such as cryptocurrencies. Upcoming U.S. inflation and employment data, along with the Fed's policy direction at its December FOMC meeting, are expected to be key factors shaping the cryptocurrency market's next move.