Bitcoin Rockets Past $85,000 as CLARITY Act Fails in Senate

Bitcoin surged past $85,000 for the first time since January, as it rose over 5% in value. This comes after the CLARITY Act, a crypto market infrastructure bill, failed to pass the Senate with a cloture vote last week. Despite its defeat, many industry insiders believe that federal regulators will move forward regardless of congressional action.

The failure of the bill has sparked a relief rally among investors, with some attributing the price surge to the fact that wealthy investors now have more cash in their hands due to the Federal Reserve's rate increase. Others see it as a bounce off tangible support from regulators like the Securities and Exchange Commission and its Innovation Exemption.

Crypto-adjacent shares are also on the rise, with Coinbase trading up by almost 6% and reaching over $200 for the first time since May. Strategy, the original Bitcoin proxy firm, is cheering too, as its recent Bitcoin purchases now look prescient with shares jumping about 8%. Circle, a stablecoin issuer and infrastructure firm, saw its shares up by over 6% in early trading.

Strategy's chairman, Michael Saylor, posted on social media about why the defeat of the CLARITY Act was good for Bitcoin, and his company has since purchased an additional 950 BTC while repurchasing $174 million of Strategy shares. Arthur Hayes, the BitMEX co-founder who now leads Flop Labs, believes that the Federal Reserve rate increase puts more cash in the hands of wealthy investors, who then buy financial assets like Bitcoin.