Bitcoin Bounces Back After Senate Rejects Clarity Act, Fed Hikes Rates

Bitcoin bounced back on Wednesday after declining earlier in the day due to the U.S. Senate's rejection of the Clarity Act, a landmark bill aimed at creating a regulatory structure for cryptocurrencies and digital assets.

The act, which had been cleared by the Senate Banking Committee in May but stalled amid an inability to gather 60 votes, was voted down with a 49-50 margin. The failure to pass the legislation does not rule out the possibility of its approval in future sessions, but such a scenario appears unlikely in the near-term.

Despite this setback for the crypto industry, the Federal Reserve's expected interest rate hike provided some relief for Bitcoin and other cryptocurrencies. The Fed raised its federal funds target range by a quarter percentage point to 3.75%-4.00%, marking the first rate increase since July 2023.