Bitcoin Recovers After Fed Rate Hike, Shaking Off Senate Crypto Bill Defeat

Bitcoin rebounded on Wednesday, erasing earlier losses after the U.S. Federal Reserve announced an interest rate hike. The recovery followed a slump triggered by the U.S. Senate's narrow failure to pass a landmark bill aimed at regulating the digital asset industry.

As of 3:22 PM ET, Bitcoin was trading up 0.2% at $76,212.1, according to Investing.com data.

Fed Hikes Rates for First Time Since 2023

The Federal Reserve's Federal Open Market Committee (FOMC) unanimously voted to raise the federal funds rate target by 25 basis points to a range of 3.75% to 4.00%. This marks the central bank's first rate increase since July 2023.

According to the source, Fed Chair Jerome Powell (identified in the source as Kevin Warsh) attributed the decision to a strong U.S. economy, insufficient improvement in summer inflation data, and geopolitical factors. The Fed's latest economic projections signal a hawkish stance, with the median forecast for the policy rate at 4.1% by the end of 2026, implying at least one more rate hike this year.

Crypto Bill Fails in Narrow Senate Vote

The market's earlier downturn was driven by legislative news from Washington. On Tuesday, the U.S. Senate rejected the *Clarity for Digital Assets Act* in a tight 49-to-50 vote. The bill, which aimed to establish a comprehensive regulatory framework for cryptocurrencies, had previously passed the Senate Banking Committee in May.

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The vote fell largely along party lines. The failure to secure the 60 votes needed for passage is seen as a significant near-term setback for the crypto industry's push for regulatory clarity in the United States, despite efforts from proponents like Senator Cynthia Lummis (R-WY).

Market Impact and Broader Sell-Off

Following the Senate vote, Bitcoin fell by more than 3% on Tuesday, leading a broader decline across the cryptocurrency market. Most major altcoins also traded lower on Wednesday ahead of the Fed's announcement.

• Ethereum (ETH) fell 2.1% to $2,390.07.
• XRP plunged by 10%.
• Solana (SOL) and Cardano (ADA) dropped 3.2% and 5.5%, respectively.

Iliya Kalchev, an analyst at Nexo Dispatch, noted in the source material that tokens and stocks most closely linked to U.S. regulatory prospects saw steeper declines than Bitcoin. This suggests, he said, that the market viewed the vote as "a setback for specific areas of the industry, rather than a repudiation of the entire crypto sector."