Bitcoin Surges Past $86,000 After Defying Expectations of Rate Hike Impact
Bitcoin (BTC) defied expectations by surging to $86,552 on September 21 after the Federal Reserve raised interest rates by 25 basis points and the CLARITY Act failed. The cryptocurrency had gained around 15% in six days, with US Bitcoin exchange-traded funds attracting a massive $999 million in new investment on Monday.
According to analyst John Gillen, the market reaction was muted due to the fact that the rate hike had already been reflected in market expectations before the decision arrived. Prediction markets and yield-curve pricing had made the rate increase feel 'almost demanded by traders', reducing the impact of the actual decision.
Gillen also argued that the CLARITY Act's failure was not necessarily a negative outcome, but rather a 'max bullish outcome' for the industry. He noted that the legislation had gradually become more focused on protecting banks rather than helping crypto, making its failure less significant.