Bitcoin Surges Past $81,000 Despite Legislative Setbacks and Fed Rate Hike

On Friday, bitcoin's price jumped past $81,000, even though the crypto industry faced a difficult week.

The leading digital asset was last seen at $80,982, having peaked at $81,055 earlier Friday in New York. It has gained close to 6% in the last day.

The price move follows a Tuesday vote in which lawmakers blocked the Clarity Act, a long-anticipated bill for crypto regulation, and a Federal Reserve interest rate increase on Wednesday.

Industry leaders had been advocating for clear regulations, and the Clarity Act, which seeks to split oversight among agencies, was designed to address that. However, lawmakers stopped the bill via a procedural vote.

The Fed raised borrowing costs for the first time amid surging U.S. inflation. Chair Kevin Warsh stated that price stability remains the central bank's top goal.

“The plain fact is that inflation is too high, and has been for too long,” Warsh said. “This summer’s inflation readings do not tell me that underlying trends have meaningfully improved.”

Historically, bitcoin has performed strongly when interest rates are low, as that typically provides more liquidity for trading.

Although bitcoin's price initially fell on the news of the Clarity Act blockage and the Fed's rate hike, it rallied on Friday.

U.S. spot bitcoin ETFs have recorded net outflows of approximately $427 million this week, data from Farside Investors shows.

Thursday saw a turnaround, with inflows of nearly $160 million after two straight days of withdrawals.

Grayscale stated in a research note on Thursday that it does not believe the Fed's decision will harm bitcoin's price, as the rate hike represents a mid-cycle adjustment rather than a cyclical shift.

Even with the Clarity Act blocked, regulators such as the SEC are moving forward with crypto-friendly rules.