Bitcoin rallied sharply on October 21, climbing from around $108,560 to nearly $114,000 within two hours—a gain of more than 5%.

The surge followed remarks from Federal Reserve Governor Christopher Waller at the Fed’s Payments Innovation Conference, where he signaled a more open stance toward integrating blockchain technology into mainstream finance.

Fed signals shift in payments approach

Speaking at the conference, Waller announced a proposal for a new type of central bank ‘payment account’ that would give companies easier access to the Fed’s payment rails, without requiring a full master account. Waller stated:

“I wanted to send a message that this is a new era for the Federal Reserve in payments—the defi industry is not viewed with suspicion or scorn.”

His comments were seen as a significant policy shift and triggered immediate rallies across top digital assets.

Market reaction and ETF flows

Bitcoin’s surge was mirrored by other large-cap assets, with Ethereum rising 3% to $4,101 and other leading coins such as Dogecoin, Solana, TRON, BNB, and XRP all gaining between 1% and 4%.

However, despite the price rally, spot Bitcoin exchange-traded funds saw net outflows over $40 million on October 20, bringing total net assets below the $150 billion mark.

Volatility and liquidations

Analysts at Glassnode noted that Bitcoin investor sentiment “remains cautious and positioning is still defensive” amid ongoing market volatility.

In the past 24 hours, over $528 million in leveraged positions were liquidated, including more than $224 million in Bitcoin shorts as the price spiked.

Macro backdrop

Market participants expect the Federal Reserve to lower its benchmark interest rate at the upcoming policy meeting, while ongoing government shutdown negotiations and delayed employment data add uncertainty.

Despite these factors, Bitcoin is now back at the $108,598 area after its rapid move.