Rate Hike Over Clarity Act: Why Bitcoin Hit $81K

Flopnets CEO Arthur Hayes believes that the recent rate hike by the Federal Reserve was responsible for Bitcoin's price surge, not the failed Clarity Act in the Senate. According to Hayes, the rate hike 'puts more dollars in the hands of rich people to consume more financial assets', which in turn lifted Bitcoin's price above $81,000 on Saturday.

The rate hike came after the Senate blocked the Digital Asset Market Clarity Act (CLARITY Act) by a vote of 49-50. Grayscale's head of research, Zach Pandl, argued that the rate hike was unlikely to drive major changes in crypto markets and compared it to a mid-cycle adjustment.

Pandl pointed out that stablecoin issuers such as Circle (CRCL) and Tether (USDT) earned higher revenues when cash rates rose. However, Hayes dismissed the Clarity Act as 'nonsense' and attributed Bitcoin's price increase solely to the rate hike.