Fed rate path poses greater threat to Bitcoin than stalled CLARITY Act

The Federal Reserve’s decision on September 16 to raise rates by 25 basis points to a range of 3.75%–4.00% was largely anticipated, allowing Bitcoin to maintain momentum following the announcement. However, market sentiment is shifting as analysts weigh the possibility of a follow-up increase. Sun warns that a second hike could force investors to abandon the view of September’s move as a one-time preventive measure, potentially triggering a broader reassessment of risk assets.

Beyond central bank policy, the market is bracing for volatility driven by Treasury yields, spot Bitcoin ETF flows, and derivatives leverage. While the CLARITY Act—which sought to clarify regulatory boundaries between the SEC and the CFTC—failed in a 49–50 Senate vote on September 15, its absence is secondary to the immediate pressure of U.S. financial conditions. Sun noted that while regulatory clarity remains essential for long-term infrastructure investment, it does not fundamentally alter Bitcoin’s current market dynamics or its immediate price sensitivity to dollar liquidity.

Data from the Fed’s September projections indicates a median year-end policy rate of 4.1% for 2026, up from 3.8% in June. This hawkish outlook, combined with a rise in the 10-year Treasury yield to 5.20% and stronger-than-expected U.S. business activity, suggests that the environment for crypto remains fragile. For now, traders are watching ETF inflows closely, though Sun cautions that these flows often react to price movements rather than serving as a reliable leading indicator for how the market will digest consecutive rate increases.