Bitcoin Defies Rate Hikes and Regulatory Setbacks to Close Week Higher
Bitcoin ended the week in positive territory despite facing three consecutive challenges: the Senate's rejection of the CLARITY Act, the Federal Reserve's first rate hike since July 2023, and a Bank of Japan increase to a 31-year high of 1.25%. The cryptocurrency briefly dipped to $75,000 before recovering above $77,000 and touching $81,000 intraday.
The Senate vote on Tuesday marked the first blow, but analysts noted that traders had been repricing the legislative path for weeks, viewing the bill's failure as a delay rather than a terminal setback. The damage was contained, with shares of Coinbase and Circle down roughly 9% each, while bitcoin slid to about $75,000.
The Federal Reserve delivered its own test less than 24 hours after the Senate vote, raising the benchmark rate by a quarter point to a target range of 3.75% to 4.00%. The price dipped briefly toward $75,000, then recovered above $76,000 within minutes.
The Bank of Japan lifted its policy rate by 25 basis points to 1.25%, the highest level in roughly 31 years, as officials responded to persistent inflation risks and progress toward the central bank's 2% price target. The move revived concerns about the yen carry trade, but bitcoin rose through the session.