Bitcoin surged in tandem with other risk assets such as stocks driven by increasing optimism as the new year unfolded. Bitcoin’s price surged past $94,000, as reported. The digital currency is currently trading at its peak value since approximately mid-November. Major stock indices experienced upward movement, with the S&P 500 Index, the Dow Jones Industrial Average, and the Nasdaq Composite Index all recording gains for the day, as reported. When queried about the recent surge in the values of risk assets, multiple analysts highlighted the shifting sentiment among investors. “This rally looks like classic risk-on positioning after the holidays,” Joe DiPasquale shared. “The primary driver appears to be the enhancing sentiment regarding the first quarter growth outlook, which is resulting in elevated equity valuations and subsequently lifting crypto prices as well,” he noted. “Additionally, as the new year approaches, we frequently observe new capital entering the crypto market, particularly if ETF inflows continue to show a positive trend,” the analyst added.
Tim Enneking stating, “The wonderfully steady (but still tentative) move up since Christmas Eve is almost certainly a reflection of New Year’s optimism and a desire to put a horrible Q4 behind us more than anything else – and is certainly not a function of any fundamental change in the trading or economic landscape.” He pointed out that “In the same way that there was no fundamental reason for BTC to lose over 35% of its value between Oct. 6 and Nov. 21, there is no fundamental reason driving the recovery now.” Market analysts have highlighted the significant influence of macro variables, commenting on developments like the anticipated Federal Reserve policy changes. The U.S. central bank has captured considerable attention in recent years, having raised the target range for the benchmark federal funds rate to its highest level in more than a decade, followed by a gradual reduction.
President Donald Trump has addressed these issues, expressing his desire for Federal Open Market Committee members to reduce rates. As Fed Chair Jerome Powell’s term approaches its conclusion later this year, speculation is mounting regarding the president’s upcoming nomination for his successor in this pivotal role. Recent reports have identified several front-runners, such as Kevin Hassett, the director of the National Economic Council, yet Trump has yet to announce his nominee. Greg Magadini shared insights on current trends and macro developments, stating via email that “Crypto markets are rallying alongside tech and precious metals after underperforming in 2025,” adding that “2026 has big themes around easy money, fiat debasement and global deficits.”
“Since Jan 2023, the US treasury yield curve has steepened as the Fed moved away from a hawkish rate-cycle to a dovish one,” he stated. “This balance between easy money and inflation has been threaded carefully by Jerome Powell to the frustration of the Trump administration. Trump is expected to announce the next Fed chairman appointment in January (although if confirmed, the change will take place in May 2026),” noted Magadini. “The market anticipates a notably dovish appointment.” The market expert provided additional insights, analyzing how these developments might influence the price level. “Combine lower rates with geopolitical demands for deficit spending and we can see how inflation could become sticky if the US finds itself financing regime changes,” he stated. “Precious metals are starting to signal geopolitical changes as sovereign FX reserves transition away from USD into a range of alternatives. Historically, geopolitical spending has been the greatest driver of deficit expansion,” he claimed. “This weekend’s geopolitical risks are likely to tilt towards inflationary despite the hope for lower oil prices.” Fiat hedges experienced a notable rally today, while the UST curve showed signs of steepening.