Bitcoin Climbs 2.5% as Risk Appetite Returns, Fed Takes Aim at Debanking

Bitcoin rose 2.5% over the past 24 hours to trade near $66,000, snapping a multi-day slide as broader risk assets rallied and the Federal Reserve proposed new rules that could end crypto debanking.

The largest cryptocurrency by market cap bounced sharply from Tuesday's intraday low of $62,500, tracking gains across equities as fears over AI disruption to legacy software companies began to ease. The S&P 500 closed 0.8% higher, while the Nasdaq 100 gained 1.1%.

Fed targets debanking

The Federal Reserve on Monday proposed rules that would eliminate "reputation risk" from its supervisory framework — the mechanism regulators have used to pressure banks into cutting ties with crypto firms. Fed Vice Chair for Supervision Michelle Bowman said discrimination against "involvement in disfavored but lawful businesses, including cryptocurrency" has no place in the Fed's oversight.

The proposal follows JP Morgan's admission last week that it closed more than 50 Trump-affiliated accounts in 2021 — revelations that have intensified scrutiny of banks' treatment of politically disfavored clients. Comments on the rule are due in 60 days.

Improving sentiment

Iran's deputy foreign minister Majid Takht-Ravanchi said the country "is ready to take any necessary step to reach a deal with the U.S.," according to Iran International, tamping down fears of an imminent military confrontation.

Software stocks bounced 1.7% after Intuit and DocuSign announced partnerships with AI firm Anthropic, signaling incumbents may adapt to AI rather than be displaced by it. Bitcoin miners with AI-adjacent data center operations — Bitdeer, Cipher Mining, Hut 8, and TeraWulf — rallied 6-10%.

The Crypto Fear & Greed Index sits at 11, up slightly from 5 earlier this week but still in "Extreme Fear" territory. Contrarian investors often view such readings as a potential accumulation signal.

The bounce comes against a brutal backdrop. Bitcoin is down roughly 29% year-to-date and more than 50% below its October all-time high of $126,080. U.S. spot Bitcoin ETFs have bled $4.5 billion in 2026, with BlackRock's IBIT alone shedding over $2 billion in the past five weeks.

The Coinbase Premium Index — a proxy for U.S. institutional demand — has been negative for a record 40 consecutive days, suggesting American buyers remain on the sidelines even as prices stabilize.

Safe havens retreated as risk appetite returned: gold fell 1.5% to $5,154 per ounce, while crude oil slipped 0.5%.