Fed's Waller hints rate pause, Bitcoin jumps 10%

Bitcoin surged over 10% in 24 hours after Federal Reserve Governor Christopher Waller hinted the central bank may pause its interest rate hikes.

The rally follows months of aggressive Fed tightening to cool inflation, which had weighed on risk assets like crypto and tech stocks. Waller’s comments, made in a speech on Friday, signaled a potential shift in policy, easing pressure on markets. Investors had been bracing for further rate increases, which typically strengthen the dollar and make speculative assets less attractive.

The sudden price jump triggered a massive squeeze on short sellers, wiping out $415 million in leveraged bets against Bitcoin, according to data from Coinglass. Short sellers borrow assets to sell high, expecting to buy them back cheaper later. When prices rise instead, they’re forced to cover their positions at a loss, fueling the rally further. Bitcoin’s price climbed from around $26,000 to over $28,000 in hours, dragging other cryptocurrencies like Ethereum higher as well.

Markets are now watching for the Fed’s next policy meeting in November, where officials will decide whether to hold or raise rates. A pause could sustain the momentum for risk assets, but traders remain cautious. Inflation is still above the Fed’s 2% target, and economic data in the coming weeks could reverse the optimism. For now, Bitcoin’s bounce shows how sensitive crypto remains to traditional finance—especially the Fed’s every word.