Bitcoin did something the crypto market was not necessarily expecting on September 21, instead of falling after the CLARITY Act failed and the Federal Reserve raised interest rates by 25 basis points, Bitcoin climbed to $86,000, a level not seen since January 28.
The cryptocurrency had gained roughly 15% in six days, while US Bitcoin exchange-traded funds attracted $999 million in new investment on Monday, according to Farside Investors data cited by Bitcoin Magazine.
The question now is less about why the market ignored the bad news and more about whether investors had already absorbed it before the events actually happened.
Bitcoin Price Today: BTC USD Reaches $86,000
Bitcoin recently traded at $86,552 after reaching $87,330 on Monday, according to Bitcoin Magazine. Over the previous seven days, its price had climbed nearly 13%.
The move came despite two developments that had been widely expected to put pressure on crypto: the failure of the CLARITY Act and the Federal Reserve's 25 basis point rate hike.
Analyst John Gillen offered an explanation for why the market reaction was different from what some investors expected.
Why the Fed Rate Hike Did Not Spark a Bitcoin Selloff
According to Gillen, the Federal Reserve's rate hike had already been reflected in market expectations before the decision arrived.
Prediction markets and yield-curve pricing had made the rate increase feel almost demanded by traders. As a result, when the Fed actually raised rates by 25 basis points, the market reaction was muted rather than sharply negative.
The same idea applied to the CLARITY Act, Gillen argued. Weeks of uncertainty surrounding the legislation had already been weighing on prices. Once its failure became clear, that uncertainty was no longer hanging over the market.
CLARITY Act Failure Takes a Different Meaning
Gillen's interpretation of the legislation was also notable.
He argued that the CLARITY Act had gradually become legislation designed to protect banks rather than help crypto. Because of that, he described its failure as a “max bullish outcome” for the industry.
The argument was not that the bill's failure was positive on its own, but that the market had already spent weeks dealing with the uncertainty surrounding it.
SEC Moves Into the Spotlight
Gillen also pointed to what happened after the CLARITY Act failed.
He had previously said that the Securities and Exchange Commission would move quickly to fill the gap with its own rules if the legislation collapsed.
According to Gillen, the SEC's response was “very bullish” and “very constructive.” He argued that the guidance opened the way for new products and services and was more specific and workable than the stalled bill would have been.
Bitcoin ETFs Pull In $999 Million
Another major part of Monday's Bitcoin story was the flow of money into U.S. spot Bitcoin ETFs.
Farside Investors data showed that the funds received $999 million in new investment on Monday, according to Bitcoin Magazine. It was the biggest single-day inflow since October 6, when the funds received more than $1.2 billion and Bitcoin reached an all-time high of $126,080.
BlackRock's iShares Bitcoin Trust received $381.4 million, the largest amount among the funds listed. The ARK 21Shares Bitcoin ETF received $289.1 million, while Fidelity's Wise Origin Bitcoin Fund attracted $238.8 million.
ETF Buyers Move Back Into Profit
Bloomberg ETF analyst James Seyffart said Monday that the average ETF buyer was now in profit after the estimated ETF cost basis moved above $81.72 for the first time since January.
The development came as Bitcoin continued its six-day advance and ETF inflows approached the $1 billion mark.
Ethereum (ETH USD) and Sui Also Move Higher
Bitcoin was not the only cryptocurrency showing stronger momentum.
Ethereum climbed above $2,700 and briefly touched $2,800, while Sui gained roughly 30% in 24 hours, according to the details provided.
Gillen said the sharper action was taking place in altcoins, even as Bitcoin continued moving higher.
Bitcoin's 50-Week Average Comes Back Into Focus
The latest Bitcoin move can also be viewed through its moving averages.
Bitcoin's return above its 50-week moving average was described as a move back above its one-year average rather than evidence on its own that the market had become overheated.
CryptoQuant data cited by Bitcoin Magazine also showed Bitcoin crossing above its 365-day moving average. The report described that move as a signal that Bitcoin had finished being in a bear market.
Gillen's broader argument was that crypto had spent months lagging rallies in other asset classes. From that perspective, the recent move represented a catch-up rather than an established bubble.
For now, Bitcoin's climb toward $87,000, the $999 million ETF inflow and the gains in cryptocurrencies such as Ethereum and Sui have put the market's recent strength under the spotlight.
