Bitcoin Holds at $75,000 Amid Fed Rate Hike and Clarity Act Setback

Bitcoin (BTC) calmly absorbed the Federal Reserve's first interest rate increase in three years. As of 7:40 a.m. on July 17, Coin360 reported BTC at $75,711, up 0.08% from the previous day. Ethereum (ETH) dipped slightly to $2,394, down 0.22%, while XRP rose 0.1% and Solana (SOL) climbed 0.64%. Zcash (ZEC) surged 16.49% to $1,304, standing out as a strong performer. BTC dominance remained steady at 58.68%.

The Federal Open Market Committee (FOMC) unanimously raised the benchmark rate to 3.75%-4.00% by 25 basis points on July 16 (local time), marking the first increase since July 2023. The committee stated this move would support a more timely return to its 2% inflation target. With 16 members, a significant number left open the possibility of further hikes this year.

Fed Chair Kevin Warsh emphasized in a press conference that inflation remains 'too high,' noting recent data has not shown sufficient improvement in underlying price pressures. He stressed the decision was based on economic conditions rather than market pricing.

Market reaction was muted as the rate hike probability had already risen from 30% at the start of September to 83-92% just before the announcement, with CME FedWatch indicating a 95% likelihood. The Clarity Act's Senate vote rejection on the previous day compounded the negative sentiment, pushing Bitcoin below $76,000 ahead of the announcement and triggering $545 million in long liquidations over the past week, along with $462.73 million net outflows from ETFs.

Given that the outcome was already reflected in prices, Bitcoin remained stable after the announcement, with Ethereum fluctuating between $2,370 and $2,430 and most top 20 cryptocurrencies holding steady or seeing modest gains. Despite President Trump's push for rate cuts during his second term, this decision took a contrary direction. The market is noting that Bitcoin did not plummet amid the dual negative factors of the Clarity Act's near-failure and the interest rate hike.