The Bitcoin and cryptocurrency market has strongly recovered after the remarks of a Fed official.

The cryptocurrency market has recorded a significant recovery this weekend after Ms. Susan Collins, President of the Federal Reserve Bank of Boston (Fed Boston), made a statement that the Fed is prepared to use market stabilization tools if concerns about liquidity increase. The Fed signaled intervention if necessary. In an interview with the Financial Times, Ms. Collins emphasized that although interest rates are the main tool in monetary policy, they are not the only tool that the Fed can use when faced with liquidity shortages or disruptions in market functioning. She said: "Interest rates are the main tool, but they are not necessarily the best tool to address liquidity challenges or market function." Mrs. Collins' statement came in the context of the U.S. government bond market, particularly the 10-year bond – a key indicator for mortgage lending and long-term loans – facing significant pressure as yields soared above 4.5%. This indicates that investors are concerned about risk and are selling off bonds. Crypto recovers strongly – Bitcoin surpasses the $84,000 mark Immediately after the comments from the Fed, the cryptocurrency market reacted markedly positively. Bitcoin (BTC) is up 5 percent on Friday, surpassing $80,000 and approaching $84,000 at press time. This is a notable reversal after BTC fell more than 4 percent on Thursday due to "risk-off" sentiment in global markets as fears of a trade war intensified. Not only Bitcoin, but major altcoins like Ethereum (ETH), XRP, and Solana (SOL) also saw significant price increases following the market recovery. Expectations for a similar move in 2020 Cryptocurrency investors are now expecting that if the bond market continues to sell off and liquidity dries up, the Fed may restart an intervention program similar to that of 2020. Then, after the COVID-19 shock, the Fed bought large volumes of government bonds to lower interest rates and stimulate the economy. A year later, Bitcoin skyrocketed from $5,000 to over $60,000. Summary The latest signals from the Fed indicate that the agency is ready to be flexible and proactive in responding to liquidity risks. For the cryptocurrency market – which is sensitive to monetary policy – this is a powerful morale booster, paving the way for recovery after recent negative volatility. Investors are closely monitoring every move of the Fed, as even a small signal can significantly impact risk assets like cryptocurrencies.