Bitcoin experienced a significant surge on Monday, increasing by 3.6% and crossing the $115,000 mark. This upswing was fueled by a rally in equities and an enhanced risk appetite among investors, attributable to emerging signs of improved trade relations between the United States and China. The positive shifts in sentiment were reflected in the broader cryptocurrency market, which saw a total market value increase of 3.7%, bringing it to $3.9 trillion.
In addition to Bitcoin’s rise, several major cryptocurrencies also saw notable gains. Ether surged by 7% to reach $4,200, while BNB increased by 2.8% to hit $1,149. XRP also saw a modest rise of 1.3%, bringing it to $2.64.
The optimism in the markets was heightened over the weekend as senior economic officials from the US and China outlined a framework for a preliminary trade deal, which Presidents Donald Trump and Xi Jinping are expected to review later this week in South Korea. The proposed agreement includes a pause on more severe US tariffs and Chinese restrictions on rare earth exports, a development that could help alleviate some of the trade tensions that have persisted for months.
As markets brace for a week filled with central bank meetings and major corporate earnings reports, attention turns to monetary policy discussions in Japan, Canada, Europe, and the US. The Federal Reserve is anticipated to reduce interest rates by 25 basis points, following a slight dip in September inflation which rose just above expectations. With the government shutdown creating uncertainty around economic data, investors remain cautious.
The mixed signals surrounding inflation have bolstered expectations for a quarter-point rate cut, potentially moving the Fed’s benchmark rate from 4.0% to 4.25% by Wednesday. September’s Consumer Price Index revealed a year-on-year inflation rate of 3%, marginally below the consensus estimate of 3.1%. Cooling inflation, combined with optimistic earnings prospects, has led to increased risk-taking among investors, pushing them towards cyclical assets. As a consequence, Treasury yields have eased, the dollar remained steady, and gold saw profit-taking as traders sought growth opportunities.
Additionally, institutional interest in digital assets has been rising, particularly as traders shift towards digital asset treasuries. Concerns over MicroStrategy’s growth outlook seem to contrast with growing confidence in firms like Metaplanet, BitMine, and Galaxy Digital. Miners have received support from pivots towards AI infrastructure and capital inflows, with companies such as TeraWulf, CleanSpark, and Iren emerging as early beneficiaries.
Among the major cryptocurrencies, Solana, Jupiter, and Virtuals outperformed on the back of supportive ecosystem developments, while Tron and Ethena exhibited mixed trading patterns amid shifts within decentralized finance (DeFi) sectors. Looking ahead, the trajectory of Bitcoin’s price, nearing the psychological milestone of $120,000, will be influenced by the upcoming decisions on interest rates, outcomes from US-China trade discussions, and the forthcoming corporate earnings reports.
