Bitcoin Shrugs Off Fed Hike, CLARITY Act Failure
BitGo Research claims that Bitcoin has demonstrated resilience in the face of two significant negative events. The first was the Federal Reserve's decision to raise interest rates by 25 basis points, which saw the federal funds target range increase to 3.75%-4.00%. This move, combined with the release of new rate projections, indicated that policymakers expect higher rates for longer.
The dot plot showed a median federal funds rate of 4.1% for both 2026 and 2027, up from previous projections of 3.8% and 3.6%, respectively. Sixteen out of eighteen Fed participants projected at least one additional rate increase before the end of the year.
Traditional markets reacted strongly to the hawkish message, with the Dow ending down 1.21% and the S&P 500 falling 0.44%. Shorter-term Treasury yields rose, and the dollar strengthened following the decision. However, Bitcoin initially dropped towards $75,000 before recovering to around $76,000-$76,700 within hours.
Just one day prior to the Fed's decision, the Senate had rejected cloture on the Digital Asset Market Clarity Act, a bill that sought to establish a federal framework for digital asset oversight. The 49-50 vote left the bill short of the required three-fifths threshold. Bitcoin fell towards the mid-$75,000 area following the procedural defeat.
BitGo treated these two events as separate negative catalysts and argues that Bitcoin's muted response to both provides a more useful signal than either event alone. Cipolaro notes that a muted response does not establish that future regulatory or monetary setbacks have been fully priced into Bitcoin.