Crypto market rebounds above $3 trillion as ‘Vanguard effect’ jolts ETF flows and Fed cut odds jump

Crypto markets staged a turnaround on Tuesday as traders responded to surging Fed 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, up roughly 8% over the past 24 hours, while ether reclaimed $3,000 after a 10% jump, according to The Block's price page.

Total crypto market capitalization rose to $3.06 trillion, recovering after slipping below $3 trillion during Sunday night’s sell-off.

ETF flows, the ‘Vanguard effect’ and BoA’s allocation shift

Bloomberg Intelligence analyst Eric Balchunas said 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.

“Bitcoin jumps 6% right around the U.S. open on the first day after the ban lifted. Coincidence? I think not,” Balchunas wrote on X, noting that BlackRock’s IBIT saw $1 billion in volume within the first 30 minutes.

Vanguard’s reversal comes the same day Bank of America reportedly told advisers across Merrill, Private Bank and Merrill Edge that clients can now allocate 1%–4% of portfolios to crypto, an end to a long-standing 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.

“The second-largest brokerage flips its policy… and no one is fired up,” he wrote.

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.

Fed rate cut expectations

Traders are also betting more aggressively on lower interest rates.

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 Fed to hold the current 375–400 bps target range.

The shift has supported a broader bid across risk assets that rely on looser liquidity conditions, including crypto.

Other market movers

Across the top-20 assets, Cardano gained about 14.5% and Solana added 11%.

Meanwhile, Chainlink climbed more than 12%, helped in part by the launch of Grayscale’s new Chainlink ETF (GLNK) on NYSE Arca, which gives U.S. investors their first spot product tied to LINK and added an incremental catalyst to an already strong day for oracles.

Atkins signals crypto rulemaking coming

In a separate interview on CNBC's Squawk Box, SEC Chairman Paul Atkins said the agency is preparing an “innovation exemption” and expects to move forward on long-delayed crypto rulemaking “in a month or so.”

Atkins framed the effort as part of a broader plan to modernize the U.S. capital markets rule book.