Fed Rate Hike Crushes Bitcoin's $80,000 Dream

Bitcoin's ability to break above $80,000 has become increasingly difficult due to tighter U.S. monetary policy and the setback of the CLARITY Act. According to Coinshares' James Butterfill, head of research, these two factors will likely delay a stronger crypto recovery in the near term.

The Federal Reserve raised interest rates by 25 basis points to 3.75%-4% on September 16, marking its first increase since July 2023. The Fed's projections show a substantially higher expected rate path, with the median federal funds rate at 4.1% for both 2026 and 2027.

Butterfill views this as a difficult setup for Bitcoin into year-end, stating that 'a decisive break above US$80,000 is unlikely without either a meaningful improvement in the inflation outlook or a significant change in monetary policy expectations.'