James Butterfill, Head of Research at CoinShares said:
A hawkish Fed and the collapse of the CLARITY Act should have been bad news for crypto. Instead, prices have rallied. That doesn't mean crypto has decoupled from macro. It means the macro story has changed.
Three things have driven the move. The first is a regulatory dividend: after CLARITY failed, the SEC stepped in to give clearer guidance across a range of digital assets. The second is steady whale buying since August. The third is heavy fund inflows, with US$3.5bn in just three trading days. Falling oil prices have also eased inflation fears.
The real signal is how crypto has held up against a sharp hawkish turn. Economic data remains strong despite a soft jobs picture. Fed Governor Barr has flagged rising inflation risk, and Goolsbee has warned the energy shock could make inflation stickier. Markets now price a 77% chance of an October hike. Ten-year Treasury yields have broken above 5%, their highest since 2007.
On a conventional reading, Bitcoin should have sold off hard, because Treasuries have rarely looked more attractive. It barely moved.
The reason is debt. With US government debt at around 122% of GDP, investors are asking how long rates this high can last. Yields above 5% make servicing that debt far more expensive, and they raise the odds of a "Bessent bazooka": large-scale Treasury buying to cap yields.
That remains a tail risk, not our base case. But markets are no longer just worried about rates. They're worried about whether the policy framework behind those rates is sustainable. That is why crypto is rallying.
