Crypto Prices Rallied as Fed Hike Hopes Faded
Investors increased bullish bets on digital assets after federal rate hike probabilities declined to 24.9%.
Updated on Oct. 2, 2026 in Employment
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Cryptocurrency prices including Bitcoin, Ethereum, and XRP rose over 2% on October 2, 2026, as traders adjusted positions ahead of the upcoming U.S. jobs report. The shift in market sentiment followed a decrease in the implied probability of a Federal Reserve interest rate hike.
Why it matters
The drop in rate hike expectations has lowered the perceived hurdle for risk-on assets, as the 10-year Treasury yield remains at 5.25%. Household investors should note that increased activity in derivatives markets often signals higher volatility for digital portfolios.
Bitcoin open interest reached $56.2 billion, a 4.3% increase compared to the 626,000 BTC recorded on September 30, 2026. Perpetual funding rates for these bullish positions tripled from 3% to 10%.
The players
Coinbase
A digital asset exchange that facilitates retail and institutional trading of cryptocurrencies.
Robinhood
A financial services platform providing retail investors with access to commission-free trading of stocks and crypto.
The details
Derivatives traders opened new bullish positions as Bitcoin prices climbed to $86,500, driving a 4.3% increase in total open interest. This market activity reflects a shift in speculative strategy as the likelihood of central bank tightening diminished. Stocks tied to the sector, including Coinbase and Robinhood, also saw 2% price increases as broader market sentiment responded to the changing yield environment.
Timeline
September 30, 2026: Bitcoin open interest stood at 626,000 BTC.
October 1, 2026: Paul Atkins proposed a new regulatory framework for crypto custody.
October 2, 2026: Bitcoin, Ethereum, and XRP prices rallied.
Money Landscape
The current 10-year Treasury yield of 5.25% matches interest rate levels not seen since April 2002. This environment serves as the baseline for assessing how investors value risk-on assets like digital currencies.
The increase in funding rates to 10% suggests that leveraged trading has become more expensive for those maintaining bullish positions. Investors should review their exposure to crypto-related stocks and digital assets, as these sectors remain highly sensitive to Federal Reserve policy.
The takeaway
Market volatility often follows shifts in interest rate projections, making it important to monitor upcoming economic data releases for changes in sentiment. Consider reviewing your asset allocation with a qualified financial professional to ensure it aligns with your long-term risk tolerance.
Further reading
For broader context on how shifting market trends impact household budgets, visit Employment.
Source note: This article includes information reported by Benzinga.
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