Crypto Market Stumbles After Senate Blocks Clarity Act, Fed Hikes Interest Rates

The U.S. Senate's failure to pass the CLARITY Act on September 15, 2026, and the Federal Reserve's decision to raise interest rates by 25 basis points on September 16 have sent shockwaves through the cryptocurrency market.

Bitcoin, Ethereum, and XRP all pulled back on Wednesday, driven lower by the deadlock in Congress and the Fed's rate hike. The absence of bipartisan consensus on the CLARITY Act, which aimed to clarify regulatory jurisdictions between the SEC and CFTC for token issuers and intermediaries, unwound buy-side positions built up over weeks of regulatory anticipation.

The Federal Reserve's decision to raise interest rates has added downward pressure on the market. The benchmark policy rate is now set at a range of 3.75% to 4.00%, marking the central bank's first rate increase since 2023. This move, combined with rising 10-year Treasury yields, has tightened liquidity costs across risk assets.

The price of Bitcoin dropped over 3% on Wednesday, consolidating near $75,800 after opening trading at $75,588. Ethereum fell to $2,498, marking a 4.6% daily slide. XRP retreated to the $1.28 to $1.29 zone, posting a single-day loss of nearly 10%. The forced liquidation of over $600 million in leveraged positions over the past 24 hours has contributed to the market's volatility.