Fed Hike Temporarily Lifts Bitcoin from Clarity Act Rejection

The Federal Reserve's interest rate hike has given Bitcoin a temporary reprieve from its earlier losses. The world's largest cryptocurrency had plummeted over 3% on Tuesday after the US Senate failed to pass the Clarity Act, a landmark bill aimed at creating a regulatory structure for cryptocurrencies and digital assets.

The act, which was cleared by the Senate Banking Committee in May, needed 60 votes to pass but fell short with a 49-50 vote. Senator Cynthia Lummis (R-Wyo.) had said that the latest text of the bill met Democratic demands, including new ethics provisions agreed upon by President Donald Trump.

While some crypto proponents, such as Coinbase CEO Brian Armstrong, believe US market regulators could create comparable regulations without Congressional approval, others, like CFTC Chairman Michael Selig, are optimistic about getting the job done using existing statutory authorities.