The Fed Hiked Rates and Bitcoin Went Up: Here’s Why That Matters

The first Fed rate hike in over three years didn't bring BTC down for long.

After the CLARITY Act setback witnessed on September 15, all financial eyes turned to the Fed a day later when the US central bank raised the key interest rates by 25 bps for the first time in over three years.

This development is considered bearish for risk-on assets like BTC, especially when it came with a 12-0 vote by policymakers, and the cryptocurrency’s price dipped after it became official. However, bitcoin rebounded swiftly, recovered the losses, and is actually велл in the green after the Fed’s move. What’s up with that?

BTC Shrugs Off a Rate Hike

The US Senate’s failure of the CLARITY Act pushed BTC to a multi-week low of $75,000, and the market anticipated another leg down if the Fed indeed hiked rates as expected on September 16. Although there was indeed a minor pullback, BTC shrugged off the losses almost immediately and turned them into gains as the week progressed.

Nansen Senior Research Analyst Nicolai Sondergaard explained that the regulatory setback produced more significant volatility than the Fed for BTC, which held better than higher-beta assets like ETH and SOL.