Bitcoin and crypto market rebound as Fed official says agency ready to stabilize market if needed

Boston Fed President Susan Collins said the institution would use market-stabilizing instruments if liquidity worries escalate.

Collins' remarks and a weaker PPI helped Bitcoin regain $83,000 on Thursday.

Ethereum, XRP, and Solana gained alongside Bitcoin.

Bitcoin (BTC) rose 5% on Friday to slightly around $84,000 after Boston Federal Reserve (Fed) chief Susan Collins suggested using "various tools" to calm markets.

Bitcoin and crypto recover as Fed official suggests involvement.

Collins told the Financial Times that the agency would use "various tools" to calm the market if liquidity worries escalate.

While an interest rate adjustment is expected, she said the Fed might use other instruments to handle monetary policy.

"The core interest rate tool we use for monetary policy is, certainly not the only tool in the toolkit and probably not the best way to address challenges of liquidity or market functioning," she told the FT.

Collins' views follow increased bond market concern. Despite stock market risk-off attitude, investors are selling the 10-year Treasury Note, a benchmark for mortgages and other long-term borrowing, pushing its yield to over 4.5%.

The Fed bought government bonds to lower rates and boost the economy after the 2020 COVID-19 epidemic gripped Treasury markets. One year after the intervention, Bitcoin's price soared beyond $60,000 from $5,000.

Since Collins' remarks, crypto investors expect a similar Fed response if Treasuries keep falling.

Bitcoin rose 5% Friday, passing $80,000 to little under $84,000 at press time. The increase reversed Thursday's more than 4% drop from risk-off emotions over global trade war worries.

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