Bitcoin Defies Expectations, Surges Past $86,000 Despite Fed Rate Hike
Bitcoin's price surged to $86,552 after reaching $87,330 on Monday, despite the Federal Reserve raising interest rates by 25 basis points and the failure of the CLARITY Act. The cryptocurrency had gained roughly 15% in six days.
Analyst John Gillen explained that the market reaction was muted due to the fact that the rate hike had already been reflected in market expectations before the decision arrived. Prediction markets and yield-curve pricing made the rate increase feel almost demanded by traders, resulting in a limited negative impact on Bitcoin's price.
Gillen also stated that the CLARITY Act had gradually become legislation designed to protect banks rather than help crypto, making its failure a 'max bullish outcome' for the industry. The Securities and Exchange Commission's (SEC) response to the bill's collapse was seen as 'very bullish' and 'very constructive', opening the way for new products and services.
The US Bitcoin exchange-traded funds (ETFs) attracted $999 million in new investment on Monday, with BlackRock's iShares Bitcoin Trust receiving the largest amount at $381.4 million.