Bitcoin Rebounds Above $85,000 Despite US Senate Crypto Setback
Bitcoin rebounded above $85,000 after briefly touching that level on Monday, its highest price since January. The cryptocurrency's recovery comes despite a setback in U.S. Senate crypto legislation.
The world's largest cryptocurrency rose as much as 3% in an hour during Asian trading and extended its recovery from late last week when it reclaimed $80,000 after falling towards $75,000 following the Senate's failure to advance the Clarity Act. The act aimed to provide clearer rules for trading venues, issuers, and tokenized assets.
Short covering and improving market conditions contributed to the rebound, as investors looked beyond Washington's regulatory setback. Institutional demand, fueled by spot Bitcoin exchange-traded funds (ETFs), also played a significant role in reviving the market. These ETFs recorded $433 million of inflows on September 18 alone.
The recovery suggests that investors are no longer treating legislative disappointment as a lasting threat to the market. Instead, they are focusing on other regulatory developments and macro conditions that support Bitcoin's price. The Federal Reserve's rate hike last week was seen as hawkish, but it did not deter risk assets from recovering.