The total cryptocurrency market capitalization rose to $3.06 trillion on Tuesday as traders responded to surging Federal Reserve rate-cut expectations and a burst of U.S. ETF activity following Vanguard's decision to lift its long-standing ban on Bitcoin ETF purchases.
Bitcoin climbed back above $91,000, gaining roughly 8% over 24 hours, while Ethereum reclaimed $3,000 after a 10% jump. The recovery followed Sunday night's sell-off that briefly pushed total market capitalization below the $3 trillion threshold.
ETF Activity and Institutional Shifts
Bloomberg Intelligence analyst Eric Balchunas stated Bitcoin's intraday surge lined up almost exactly with the U.S. equity market open, the first session after Vanguard clients regained access to spot Bitcoin ETFs. He noted BlackRock's IBIT saw $1 billion in volume within the first 30 minutes of trading.
Vanguard's reversal arrived the same day Bank of America reportedly told advisers across Merrill, Private Bank, and Merrill Edge that clients can now allocate 1% to 4% of portfolios to crypto, ending a restriction that prevented more than 15,000 advisers from proactively recommending digital asset products.
Bitwise CEO Hunter Horsley called the confluence of policy shifts a classic bear market tell, noting the second-largest brokerage flipped its policy, yet no one seemed “fired up.” Bitwise CIO Matt Hougan added that in down markets, positive developments are ignored but not forgotten, and accumulate as potential energy for the next uptrend.
Federal Reserve and Market Sentiment
CME FedWatch now shows an 87.2% chance of a 25-basis-point cut at the Dec. 10 meeting, up from 63% a month ago, with only 12.8% expecting the Federal Reserve to hold the current 375 to 400 basis point target range. The shift has supported a broader bid across risk assets that rely on looser liquidity conditions, including cryptocurrencies.
Altcoin Performance and New Products
Across the top 20 assets, Cardano gained about 14.5% and Solana added 11%. Chainlink climbed more than 12%, helped in part by the launch of Grayscale's new Chainlink ETF on NYSE Arca, which gives U.S. investors their first spot product tied to $LINK.
Regulatory Outlook
SEC Chairman Paul Atkins stated in a CNBC interview that the agency is preparing an innovation exemption and expects to move forward on long-delayed crypto rulemaking in approximately one month. Atkins framed the effort as part of a broader plan to modernize the U.S. capital markets rule book.