- Bitcoin traded above $81,000 on Saturday, recovering from a drop following the Senate’s rejection of the CLARITY Act.
- Flop Labs CEO Arthur Hayes credited the Federal Reserve’s rate hike, not crypto legislation, for lifting Bitcoin this week.
- Grayscale’s head of research called the same hike a mid-cycle adjustment unlikely to drive major changes in crypto markets.
- The Federal Reserve raised its benchmark rate by 25 basis points to a range of 3.75% to 4%, its first increase since 2023.
As Bitcoin (BTC) traded above $81,000 on Saturday, Flop Labs CEO Arthur Hayes dismissed the Digital Asset Market Clarity Act as “nonsense” and wrote that crypto needed the Federal Reserve’s rate hike instead. “See, we didn’t need some nonsense piece of crypto regulation, Clarity Act, just a rate hike that puts more dollars in the hands of rich people to consume more financial assets,” Hayes posted on X on Friday.
The Federal Open Market Committee voted 12-0 on Wednesday to raise the target range for the federal funds rate by a quarter point to 3.75% to 4%. It was the central bank’s first increase since July 2023. The committee stated that inflation remains elevated, adding the move would support a timelier return to its 2% goal.
However, Grayscale‘s head of research, Zach Pandl, wrote in a note that the hike was unlikely to drive major changes in crypto markets. Pandl described the move as a mid-cycle adjustment rather than a cyclical policy shift. He pointed to March 1997, when the Federal Reserve delivered a similar one-off increase, and the Nasdaq bull market continued.
The Senate did not agree to a motion to invoke cloture on the CLARITY Act on Tuesday, by a vote of 49-50. The defeat was treated across the sector as a setback, with Coinbase CEO Brian Armstrong calling the outcome a disappointment.
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