Semiconductors lift risk appetite, pulling bitcoin toward $70,000

Bitcoin edged up Friday as a rally in semiconductor stocks rekindled appetite for risk assets. Analysts say institutional money flowing into over-the-counter markets has helped dampen price volatility, even as the Federal Reserve maintains a hawkish stance.

Bitcoin traded at $64,869 at 7:37 a.m. Friday, according to CoinMarketCap, up 1.56% from 24 hours earlier. Ether also rose 1.34% over the same period, while XRP and Solana gained 1.22% and 1.72%, respectively.

Digital asset-related stocks posted broad gains on Wall Street overnight. Strategy, widely regarded as a leading digital asset treasury company, climbed 4.73%, while Coinbase and Circle Internet rose 2.18% and 4.69%, respectively. Strong earnings from Microsoft and gains in semiconductor shares sustained enthusiasm for AI investment, drawing buyers into bitcoin and other risk assets.

Results from a cross-border payment trial led by the Bank for International Settlements also lifted sentiment. Twenty-eight financial institutions, including five South Korean banks, participated in the test, which used tokenized central bank reserves and commercial bank deposits to transfer funds across borders as part of BIS's Project Agorá.

Growing institutional participation has also provided price support. According to digital asset market maker Wintermute, institutional investors accounted for roughly 72% of spot trading volume on OTC desks in the first half of this year — a record high.

Wintermute said the market's institutional tilt has become more pronounced as retail investors shifted their focus from digital assets to equities. Institutional investors tend to hold positions over longer horizons according to preset mandates rather than chasing short-term price swings, which can help reduce overall market volatility, the firm said.

Earlier, the Fed held its benchmark interest rate at 3.50–3.75% following its July FOMC meeting. The central bank said economic activity is expanding at a solid pace but that inflation remains above its 2% target. Bitcoin showed little reaction to the rate decision, trading in a narrow $63,000–$64,000 range.

The digital asset market has been gradually stabilizing in July after a sharp selloff in June. According to Galaxy Research, bitcoin spot ETFs listed on US exchanges recorded a record monthly net outflow of approximately $4.5 billion in June.

July has brought some recovery in ETF flows, however. According to SoSoValue, US bitcoin spot ETFs logged seven consecutive trading days of net inflows from July 14 through July 22. Total net inflows over that period came to $999.38 million.

Market sentiment has also improved from last month. CoinMarketCap's crypto fear and greed index currently stands at 37, placing it in "fear" territory — a recovery from last month, when the index fell as low as 16, signaling "extreme fear." The index runs from 0 to 100, with lower values indicating greater investor anxiety.

Looking ahead, a key variable for bitcoin's price trajectory is the fate of the CLARITY Act, a US digital asset market structure bill. With the Senate set to recess in August, next week is effectively the last window for the legislation to advance. Republicans recently unveiled a consolidated amendment including ethics provisions that would restrict senior government officials from issuing or promoting digital assets, but the two parties have yet to bridge their differences.