Bitcoin Defies Interest Rate Hike, Stalls on Regulatory Uncertainty

Bitcoin has managed to maintain its price above $75,000 despite two pieces of news that would normally be expected to hurt speculative assets. The US Federal Reserve raised interest rates by 25 basis points to 3.75%-4.00%, and the Senate failed to advance the CLARITY Act, a major crypto market-structure bill.

The recovery has been supported by renewed ETF demand and a more bullish options market, but the latest policy developments remove two potential supports. The Fed is signalling that rates could remain high for longer, while Congress has failed to deliver the regulatory framework many crypto companies had hoped would accelerate US adoption.

Bitcoin now faces a different test: whether the rebound can continue without easier monetary policy or a near-term legislative breakthrough. The current rally started from a much weaker base than Bitcoin's 2025 highs. After spending months around two-year lows near $60,000, Bitcoin pushed back above $70,000 in late August as Treasury yields eased and broader risk sentiment improved.

The move has since extended towards the mid-$70,000s, but still leaves Bitcoin far below its record high of over $126,000 reached in October 2025. Regulatory clarity remains supportive for Bitcoin, but its investment case is increasingly driven by broader factors including institutional flows, liquidity, Treasury yields, and demand for a scarce digital asset.