Bitcoin Faces Larger Threat from Potential Second Rate Hike
Bitcoin's path forward is now more dependent on US financial conditions and investment flows than the stalled CLARITY Act, according to HashKey Group's Tim Sun. The researcher believes that another rate increase in October could change how investors view September's hike as a single preventive move or the start of repeated tightening.
According to Sun, an October hike would affect several parts of Bitcoin's market at once, including higher long-term interest rates and tighter dollar liquidity, which could put pressure on demand. Changes in ETF flows and leveraged positions could also impact the size of any price move.
Sun considers this combination more consequential for Bitcoin than the delay to CLARITY, a bill that seeks to define how the Securities and Exchange Commission and the Commodity Futures Trading Commission oversee parts of the digital asset market. The researcher notes that while the bill's outcome would not substantially change Bitcoin's characteristics or regulatory position, its main purpose is to settle questions about market rules for digital assets.