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Crypto Industry Seeks US Regulatory Clarity After CLARITY Setback

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Crypto Breaking News

US lawmakers failed to advance the proposed CLARITY Act in the Senate on Tuesday, delivering a near-term setback for the crypto industry’s push for a clear federal regulatory framework for digital assets.

The Senate voted 49–50 on a motion to invoke cloture—falling short of the 60 votes needed to proceed to the next stage—after Democrats raised concerns tied to US President Donald Trump’s reported crypto investments, according to Cointelegraph’s coverage. Industry representatives described the outcome as disappointing, but argued that regulators’ rulemaking may still be able to narrow the uncertainty.

Key takeaways

  • The Senate’s 49–50 cloture vote means the CLARITY Act did not move forward, leaving firms without a new statutory baseline.
  • Executives pointed to potential regulatory action by the SEC and CFTC as the most immediate path to practical clarity.
  • Legal experts warned that relying on agency guidance and discretionary enforcement could keep compliance burdens high and delay planning cycles.
  • There may be another attempt to restart the bill’s momentum after Senator Thom Tillis moved to reconsider the failed cloture vote.
  • Market odds for the bill being signed in 2026 reportedly slipped to 5% on Tuesday, reflecting renewed uncertainty.

CLARITY Act stalls after Senate falls one vote short

Tuesday’s vote underscores how difficult it has been for the CLARITY Act to break through procedural hurdles. The motion to invoke cloture—used to limit debate and move legislation forward—came up short, with the Senate unable to reach the 60-vote threshold required to advance the measure.

While the vote did not eliminate the possibility of future progress, it reinforced the gap between crypto’s regulatory needs and the current US framework, which often leaves firms navigating a patchwork of securities, commodities, and state-level money-transmission rules.

According to the article, industry leaders said they were disappointed but not convinced the US is standing still. They argued that agency rulemaking could partially substitute for a stalled legislative effort, at least in the near term.

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SEC and CFTC rulemaking seen as the next best route

Ripple CEO Brad Garlinghouse said on X that the lack of legislative momentum would still be met with regulatory work. He pointed to the SEC—under Chair Paul Atkins—and the CFTC—under Chair Rostin Behnam? (Note: the original article cites a CFTC chair “Selig”) as the bodies that could issue rules to “fill the legislative gap,” adding that the industry would remain engaged in the process.

At the Solana Policy Institute Summit on Monday, Atkins committed to producing clearer crypto rules with or without additional legislation, according to the same reporting. The message was that regulators may attempt to reduce ambiguity even as Congress remains gridlocked.

But multiple executives and legal officers cautioned that this approach may only postpone a harder problem. NEAR’s chief legal officer Abhishek Vaidyanathan argued that rejecting the bill leaves companies “completely dependent on agency guidance and ongoing administrative discretion.” In practical terms, he said firms preparing longer-term budgets could still be forced back into case-by-case judgments, repeatedly performing legal work while counterparties treat regulatory uncertainty as an ongoing pricing factor.

Bitget Wallet COO Alvin Kan similarly told Cointelegraph that the bill’s failure continues to cloud how securities, commodities, and money-transmission rules apply across different crypto products.

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Why the difference between law and agency guidance matters

The industry’s concern is less about whether regulators will act, and more about predictability. A statute like the CLARITY Act can provide clearer boundaries in one place, while agency decisions can vary based on interpretation, enforcement posture, and the pace of rulemaking.

That distinction became the center of the criticism after Tuesday’s vote. Vaidyanathan highlighted how firms planning for future years—he referenced 2027 budgets—could remain exposed to prolonged uncertainty. If compliance requirements continue to depend on discretion rather than a stable statutory framework, businesses may face higher legal costs, slower product rollouts, and more conservative risk management.

For traders and market participants, ambiguity can also influence market structure: if different entities interpret the same product differently, liquidity and custody arrangements may be shaped by legal risk as much as by economics. Executives’ comments reflect the belief that rulemaking may mitigate uncertainty, but may not fully replace the certainty that comes from comprehensive legislation.

Senator Tillis moves to reconsider; timeline risks remain

Even with Tuesday’s setback, momentum is not entirely gone. The article notes that Senator Thom Tillis moved to reconsider the failed attempt, which could open the door to another cloture vote.

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1inch chief legal officer Orest Gavryliak, speaking to Cointelegraph, said the result is a “delay, not a verdict,” arguing that legislation of the CLARITY Act’s scale rarely moves in a straight line and that cloture can be brought again.

However, Vaidyanathan took a more cautious view of immediate prospects, suggesting that the next Congress is more likely to tackle market structure issues. He also pointed to the US legislative calendar: the House had canceled weeks scheduled for September 21 and 28, and the Senate’s state work period begins October 5 ahead of the November 3 election, as cited in the original report. That timing matters because it compresses the available window for lawmakers to act before the election cycle complicates legislative priorities.

In parallel, Polymarket’s odds of the CLARITY Act being signed into law in 2026 reportedly fell to 5% on Tuesday, the lowest probability since the market opened in January, according to the article. While prediction markets are not official indicators, the sharp move suggests that participants see limited near-term legislative momentum.

With the Senate vote failing to reach cloture and executives warning that agency-based solutions may only partially stabilize planning, the key question for readers is how quickly the SEC and CFTC translate Atkins’ commitments into concrete, product-specific rulemaking—and whether the CLARITY Act can regain traction before legislative focus shifts after the election.

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AI ‘net negative’ for crypto, fueling attacks and costs

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Crypto Breaking News

Phemex CEO Federico Variola has taken a critical stance on AI’s growing role in crypto, arguing that the technology is currently acting more like a drag than a catalyst for the sector. In comments on Cointelegraph’s Chain Reaction, Variola said AI has redirected liquidity away from crypto and intensified security risks—especially for smaller teams that cannot easily absorb rising defense costs.

While Phemex earlier this year outlined an AI-led shift in its own product and internal workflows, Variola’s latest remarks expanded the focus to the wider industry. He suggested the net effect of AI may be to push crypto further toward centralization rather than strengthening decentralization.

Key takeaways

  • Variola argues AI is diverting capital from crypto to other sectors while simultaneously increasing the power of threat actors.
  • He warns that higher cybersecurity burdens may concentrate security capacity among well-funded entities, potentially encouraging centralization.
  • Recent crypto incidents have been linked by industry figures to AI-enabled tactics, raising the perceived baseline risk for both self-custody and DeFi.
  • Even so, Variola sees practical uses for AI agents in portfolio support and decision-making, while stopping short of expecting full replacement of human judgment in trading.

Why Variola says AI is a “net negative”

Speaking during the episode, Variola said it is hard to be bullish about AI within crypto because it changes incentives on both sides of the equation. According to him, liquidity has been significantly rerouted into AI-related activity, reducing the competitive attention and funding available to the crypto industry itself.

At the same time, Variola argued AI is accelerating adversarial capabilities. In his view, AI is not simply raising the technical quality of code—it is also helping attackers exploit protocols and scale tactics that rely on automation, speed, and sophistication.

“It’s difficult to envision a world in which AI is going to favor crypto specifically as an industry, since a lot of the fixes that we see actually encourage more centralization rather than less centralization.”

For investors and builders, the core tension in Variola’s argument is straightforward: if staying safe increasingly requires large security budgets, then the economic pressure to centralize operations may intensify. That matters for an industry whose claims to value often depend on decentralization and broad participation.

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Security pressure as AI changes the threat landscape

Variola’s skepticism lands alongside a period in which AI has repeatedly entered discussions around crypto security incidents. One example cited in the broader conversation is a July incident in which attackers reportedly drained roughly $116 million in Bitcoin from more than 5,200 addresses tied to a Coldcard hardware wallet flaw. The report framework around that incident has widely been tied—at least in industry narratives—to the malicious use of AI.

Coinkite CEO Rodolfo Novak also publicly warned developers at the time that the “sober reality” is that AI-assisted code review can uncover bugs faster than even experienced teams can keep up with. That perspective aligns with Variola’s concern: the same speed and scale that makes AI useful can also shorten the window between vulnerability discovery and exploitation.

Variola explicitly tied these risks to the economics of security staffing. He said small protocol teams may no longer be able to function effectively without “a massive cybersecurity budget,” implying that defensive measures may become structurally out of reach for many decentralized projects.

The stakes are not limited to protocol-level vulnerabilities. Variola also suggested that AI-driven threats could reduce the appeal of self-custody and decentralized finance for everyday users. He argued that as AI becomes more pervasive, attacks may increasingly take the form of device compromises or social engineering campaigns—conditions that could raise the number of risks retail users must actively manage.

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“As AI becomes more pervasive, and whether it is your devices being hacked or social engineering, or all these kinds of strategies that are empowering threat actors, that makes DeFi a lot less appealing for a retail user because you have to worry about so many things that you didn’t have as much before.”

Defensive AI exists—but the trade-off may still be hard

Not everyone in the security community shares the same level of pessimism. The article notes that security experts have also highlighted AI’s defensive potential. For example, CertiK senior blockchain investigator Natalie Newson told Cointelegraph in April that “AI can also be one of the biggest defenses,” even while warning that attackers are simultaneously becoming more sophisticated.

This is a critical nuance for readers: the debate is not simply whether AI helps attackers or defenders. It is about pace, cost, and who can afford to respond quickly. If attackers can iterate faster while defenders face rising operational expenses, the overall balance may still tilt toward the party with resources—whether that is a centralized service, a large security team, or an entity able to purchase rapid incident response.

That framing supports Variola’s larger thesis: even if AI improves security tools, the resulting “fixes” may require organizational scale that decentralized projects struggle to replicate.

Where Variola sees room for AI in crypto

Despite his broader caution, Variola said he sees tangible benefits in AI agents—specifically for user-facing assistance such as helping investors build portfolios or improving trading decisions. However, he emphasized that these tools should be treated as decision support rather than autonomous replacements.

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In his words, users would remain responsible for the final action: AI agents might help with information processing, strategy framing, or execution context, but they are not expected to fully replace the judgment involved in taking a trade.

For market participants, this distinction may be practical. Portfolio guidance and workflow automation can reduce friction for retail users, but security and risk management still depend heavily on human oversight—especially in a threat environment Variola describes as increasingly shaped by social engineering and device compromise.

As AI adoption accelerates across crypto platforms, readers should watch two closely connected questions: whether AI-enabled defenses meaningfully reduce real-world exploit frequency, and whether the cost of those defenses pressures the ecosystem toward larger, more centralized operators. The answers will likely determine whether AI ultimately broadens participation—or quietly narrows it.

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Bitcoin Miners Own Something AI Developers Can't Build Fast Enough

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Accelerating Data Center Moratoriums in the US

Bitcoin (BTC) mining sites have become some of the scarcest permitted power capacity in the United States. With 151 data center restrictions still active, AI developers face years of waiting to plug in anywhere new.

CoinShares cited at least 225 data center moratoriums or restrictions in its second-quarter mining report. The clampdown turns already energized capacity into a scarce asset.

States Are Closing the Door on New Power

The restrictions span 30 states, according to ElectricChoice tracking cited in the CoinShares report. Maine banned new data center construction outright in April.

Accelerating Data Center Moratoriums in the US
Accelerating Data Center Moratoriums in the US. Source: CoinShares

CoinShares calls New York the most significant development. It paused environmental permits for facilities of 50 megawatts (MW) or more on July 14. Governor Kathy Hochul’s first statewide permit freeze runs for a year.

Restrictions have also spread at the county level across Ohio, Michigan, Georgia, and Indiana. More than a third of counties there have moved to limit development, according to the report.

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Pennsylvania tightened review rules for large projects, while Texas halted new grid connections pending an audit.

New York exempted permits it had already deemed complete, and similar carve-outs are common. A finished approval is now worth something that a newcomer has no way to obtain.

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What Bitcoin Miners Own That Nobody Else Can Get

The queue behind those rules is the harder problem. The US interconnection queue holds roughly 2,600GW, about double the country’s installed capacity. 

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Median waits from request to operation exceeded five years for projects completed in 2025, according to research from Lawrence Berkeley National Laboratory.

Texas shows the squeeze clearly. ERCOT’s own large-load queue data put data centers at 87% of 410 GW. In PJM, projects entering service in 2025 averaged more than seven years from request to operation.

“The practical consequence is that an energised site cannot be recreated within any commercially relevant timeframe, regardless of capital available,” CoinShares added.

Existing space has tightened alongside it. CBRE recorded primary market vacancy at a record 1.4% at the end of 2025, despite supply growing by 36%, with vacancy falling to 0.3% in Northern Virginia by the first quarter of 2026.

Against that backdrop, a $3.5 billion purchase of three leased Northern Virginia AI facilities set a benchmark near $27 million per MW. Listed miners with energized but unleased capacity, in contrast, trade below $3 million per MW in some cases.

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The two numbers are not directly comparable. One reflects facilities with leases in place, while the other reflects how the market values capacity that has none.

Conversion is not free. Retrofitting mining infrastructure to AI-grade costs an estimated $8 million to $15 million per MW, compared with $700,000 to $1 million to build it for mining.

“The direction of travel is clear: regulation and grid congestion have inverted the historic discount applied to mining sites, converting what was once viewed as stranded, low grade infrastructure into some of the scarcest permitted power capacity in the US,” the report mentioned.

Meanwhile, Washington has pushed back on the restrictions. President Donald Trump warned that towns that reject the facilities will end up backwards and poor, while Republicans fear a midterm backlash over the buildout.

Operators who can fund conversion and lock in tenants, therefore, stand to capture most of that premium. Grid access is the entry requirement, not the whole business.

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Ethereum Price Prediction: ETH Shrugs Off CLARITY Act and Fed Decision, Could Break $3,000

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ETH holds at $2,400 despite the CLARITY Act and Fed decision. Ethereum whale accumulation points to a bullish price prediction.

Ethereum sits at $2,400, dropping a brutal 4% on the day amid its bullish price prediction a week earlier. The largest altcoin absorbed a legislative gut-punch and is staring down a Fed decision that would rattle most assets, yet whale wallets are still buying.

The CLARITY Act failed to clear the 60-vote cloture threshold in the Senate on Tuesday, triggering an immediate 5% drop toward $2,400 as regulatory clarity got pushed further down the road. Despite that, the setback hasn’t broken the underlying bid.

ETH holds at $2,400 despite the CLARITY Act and Fed decision. Ethereum whale accumulation points to a bullish price prediction.

Exchange netflow data shows reserves falling by 159K ETH over five days, while wallets holding 10K-100K ETH, or the whale cohort, added roughly 200K ETH to their stacks over the past week. Retail, meanwhile, dumped about 192K ETH, continuing a distribution pattern that’s held since January.

Add in $121 million of spot ETH ETF inflows on Monday, and $216.4 million on Friday, and the divergence between institutional accumulation and retail selling becomes the real story heading into Thursday’s FOMC decision.

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Ethereum Price Prediction: Will ETH Hit $3,000 This Week?

ETH is consolidating in a triangle pattern between support at $2,405–$2,485 and resistance at $2,535–$2,600. The 20-day EMA near $2,425 has held as a floor through the recent pullback, and volume has stayed constructive rather than capitulatory, a sign this dip is more consolidation than reversal.

A decisive close above $2,600 would confirm the breakout, opening a run toward the $2,800–$3,000 zone that Bitget’s analysts are flagging as the next psychological target. If ETH instead grinds sideways, the $2,400–$2,550 range could hold until the Fed decision clears the calendar.

Ethereum (ETH)
24h7d30d1yAll time

A break below $2,350 would invalidate the setup and reopen the August lows near $1,880. With a 92.3% priced-in probability of a 25bp hike per the CME FedWatch tool. Thursday’s outcome is largely baked in, and the real risk is the accompanying commentary. Full breakdown available in this Ethereum price prediction.

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LiquidChain Targets Early Mover Upside as Ethereum Tests Key Levels

ETH holders riding this consolidation are positioned reasonably well, but let’s be direct: a move from $2,400 to $3,000 on a trillion-dollar-plus asset is a solid 25% swing, not a multi-bagger. For traders chasing asymmetric upside, that math pushes attention toward earlier-stage infrastructure plays instead.

That’s the lane LiquidChain ($LIQUID) is building in. Liquid is a Layer 3 network fusing Bitcoin, Ethereum, and Solana liquidity into one execution environment. The presale is priced at $0.014956 with $960K raised so far.

Its pitch centers on a Unified Liquidity Layer and Single-Step Execution, letting developers deploy once and tap all three ecosystems rather than fragmenting liquidity across chains. Verifiable Settlement rounds out the architecture.

Research LiquidChain before the next price hike.

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Not Just the US: Global Bond Yields Hit Multi-Decade Highs. Time to Worry?

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Another Crypto Project Goes Dark as Dango Winds Down

Benchmark 10-year government bond yields surged to decades-high levels across five major economies this week. The US and UK hit marks last seen in 2007, while Japan reached a level unseen since 1996.

Germany’s 10-year yield climbed to its highest point since 2009, while France’s reached a level not seen since 2008. Oil above $100 a barrel is reigniting inflation fears ahead of a cluster of central bank meetings this week.

A Synchronized Repricing

The moves mark one of the broadest bond selloffs in years. Renewed Middle East hostilities have pushed crude prices higher, threatening to reignite consumer inflation.

That pressure has pushed yields to levels Bitcoin has never seen since the asset’s creation.

Heavy government debt issuance is compounding the pressure. US bonds’ worst decade in more than two centuries adds to the supply investors must absorb. Japan’s debt load, above 200% of gross domestic product, leaves Tokyo especially exposed to rising borrowing costs.

Why Yield Matters

Higher long-term yields ripple into mortgage rates, corporate borrowing, and government budgets. Analysts single out France as the most exposed among major economies.

“The most vulnerable sovereigns are those combining large fiscal deficits, elevated debt burdens and reliance on external capital. France stands out among developed markets.”

Masahiko Loo, senior fixed income strategist at State Street Investment Management, told CNBC.

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Markets are also bracing for the Fed’s rate decision this week, with traders pricing high odds of a hike. That could either steady or extend the global selloff.

The synchronized rise across the US, Europe, and Japan is not a single-country story. It reflects a broader repricing of sovereign risk and inflation expectations. Whether the trend stabilizes or accelerates further may hinge on how central banks respond in the coming days.

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How Netflix Star Sofia Carson Brings Her Identity to Work

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How Netflix Star Sofia Carson Brings Her Identity to Work
—Elias Tahan

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Google Just Released Its Most Advanced Audio Model. Here Is How It Ranks

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How Gemini 3.8 Live Ranked on The Speech-to-Speech Index

Google released Gemini 3.8 Live and Gemini 3.8 Live Extended Thinking on September 15, calling them its most advanced audio models yet.

The two models talk, reason, and handle tasks. But how do they rank with independent analysts? The Extended Thinking version topped Artificial Analysis’ Speech-to-Speech Index at 82.6, ahead of GPT-Live-1 and Grok Voice.

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How the Benchmarks Rank Google’s Newest Conversational AI Model

Artificial Analysis’s Index averages speech reasoning, agentic performance, arena preference, and task success rate.

Gemini 3.8 Live Extended Thinking, tested at high reasoning effort, debuted in first place. GPT-Live-1 Astra followed at 81.5 and Grok Voice Think Fast 2.0 High at 81.3.

How Gemini 3.8 Live Ranked on The Speech-to-Speech Index
How Gemini 3.8 Live Ranked on The Speech-to-Speech Index. Source: Artificial Analysis

The standard Gemini 3.8 Live placed fifth with a score of 76.0. Both variants beat Gemini 3.1 Flash Live High, which scored 71.5.

The agentic gap is wider. Extended Thinking reached 68.6% on the Tau Voice benchmark, against 37.7% for the previous generation.

On the speech reasoning benchmark, Extended Thinking scored 97.7%, edging Grok Voice at 97.2%. However, it trailed Qwen Audio 3.0 Realtime Plus, which scored 99.2%.

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Human Testers Still Reach for the Older Gemini Model

Price is where the distance opens up. The standard model runs $0.84 per hour of input audio. That is roughly half its predecessor’s $1.75 and the Index’s cheapest rate. 

Extended Thinking runs at $3.50 per hour. That undercuts GPT-Live-1 Sol at $4.47 and Grok Voice Think Fast 2.0 High at $4.80.

Latency fell as well. Average time to first audio dropped to 1.18 seconds, compared with 2.99 seconds for the older Gemini model.

Listeners, however, are not fully sold. Gemini 3.1 Flash Live still leads in preference in blind Speech Agent Arena conversations, with an Elo of 1096.

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Gemini 3.8 Live sits second at 1083. The Extended Thinking variant trails at 990, despite completing 89.1% of its tasks.

Voice AI is now being graded on two scales that point in different directions. Benchmarks reward the model that reasons hardest. Preference rewards the one who talks best. Google is currently leading both, with different models.

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Bitcoin Price Stabilizes Near $75,900 After 4% US-Session Drop

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Bitcoin stabilized near $75,900 after a 4% US-session price drop as a failed crypto bill vote and possible Fed hike weakened sentiment.

Bitcoin price fell 4% in US trading and stabilized at around $75,900 as of 8 a.m. in London. The decline came after the US failed to advance a key crypto regulatory bill, weakening industry sentiment ahead of a potential Federal Reserve interest-rate hike.

The combination puts regulatory developments and monetary policy at the center of the market backdrop. We see that the whole crypto market was also weaker after steep declines during the US session.

Bitcoin stabilized near $75,900 after a 4% US-session price drop as a failed crypto bill vote and possible Fed hike weakened sentiment.
Crypto Heatmap, Tradingview

The immediate regulatory issue was the US failure to advance a key crypto bill. Reuters had reported before the vote that the Senate was preparing to take a procedural vote on the Clarity Act, a measure that could help determine the bill’s fate. The legislation would address legal ambiguity around whether tokens qualify as securities or commodities, according to Reuters.

That setback arrived while investors were also assessing the prospect of higher US interest rates. Bloomberg described the regulatory disappointment as weighing on sentiment just ahead of a potential Fed hike. The two developments provided the context for Bitcoin’s US-session decline and the broader weakness across crypto assets.

Reuters reported on Sept. 14 that traders assigned an 85% likelihood to a rate hike on Wednesday following hot inflation data. That figure was a snapshot of expectations reported at the time, rather than a permanent measure of market consensus.

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What the Rate Odds Do, and Do Not?

Rate probabilities reflect market pricing and can change as new economic information arrives. CME FedWatch says its probabilities of future Federal Reserve target-rate changes are implied by prices for 30-Day Fed Funds futures. Its methodology makes it a reference for how interest-rate traders are pricing upcoming policy decisions.

Bitcoin stabilized near $75,900 after a 4% US-session price drop as a failed crypto bill vote and possible Fed hike weakened sentiment.
Fed Watch, CME Group

The available reporting supports the existence of elevated hike expectations, but it does not establish a precise causal chain between any one market variable and Bitcoin’s 4% decline. The reported backdrop was a potential rate increase alongside the failure to advance the US crypto bill.

Reuters also noted that elevated inflation had raised expectations of a Fed hike and that long-end bond yields were nearing 5%, creating more competition for capital. The report described a rate increase as a challenge for speculative assets, including Bitcoin.

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The Next Bitcoin Price Test

The Federal Reserve decision is the next scheduled policy event highlighted in the reporting. The decision would test the optimism that had returned to Bitcoin after its late-August rebound. Bloomberg similarly identified a potential Fed rate increase as an immediate source of pressure for the crypto market.

Bitcoin (BTC)
24h7d30d1yAll time

The regulatory question remains separate from the rate decision. The failed effort to advance the bill leaves the legislation’s future unresolved, while the Fed’s policy decision concerns the interest-rate outlook. Together, those issues frame the near-term conditions facing Bitcoin after its decline in US trading.

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Bitcoin’s level near $75,900 at 8 a.m. in London marked the point of stabilization reported by Bloomberg. The broader crypto market, however, remained weaker after the steep US-session declines.

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Tom Lee Sees Fed Rate Hike Today: Predicts a Big Equity Rally

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Tom Lee Sees Fed Rate Hike Today: Predicts a Big Equity Rally

Fundstrat’s Tom Lee expects the Federal Reserve to raise interest rates by 25 basis points today, arguing the move could still spark a substantial equity rally rather than derail one.

The Federal Open Market Committee (FOMC), the Fed’s rate-setting panel, meets today, with a decision expected at 2 p.m. ET. Lee said the hike would remove pressure for further increases, a shift he called bullish for stocks, since it would send Treasury yields lower.

Why Lee Sees the Hike as Bullish

Lee said the Fed does not need to hike to curb inflation. He cited Goldman Sachs data on four temporary distortions, portfolio fees, flash memory, tariffs, and energy.

Together, they add 1.7 percentage points to headline Personal Consumption Expenditures (PCE) inflation.

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Those distortions should fade within six months regardless of Fed action, Lee said. He estimated they could cut PCE by about 100 basis points on their own.

Still, Lee said the coming hike likely reflects market pressures rather than the Fed’s own read on the economy.

“I don’t know if the Fed really needs to accelerate that process.”

— Tom Lee, CNBC

Lee expects markets to treat the hike as the last of this cycle. He pointed to heavy cash on the sidelines and a string of down days as fuel for a rebound.

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S&P 500 Target and the AI Trade

Lee reiterated his view that corporate earnings have not yet peaked. He pointed to depressed housing investment as room for growth, potentially adding $30 to $50 to S&P earnings.

He said the S&P 500 could top 8,200 by year-end, extending earlier bullish stock calls. Technology and software shares, he added, are leading the gains.

Lee added that artificial intelligence (AI) remains central to US economic growth, even as recent developments raise new safety and oversight questions.

Lee still expects a larger pullback later this year, tied to margin debt, leverage, and initial public offering (IPO) activity. For now, he said pessimism itself is why markets have not yet peaked.

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The Fed rate decision is shaping up to be a nightmare for Warsh. Bitcoin might still shine

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With Fed rate hike all but assured, here's how markets might react

According to Brooks, the primary narrative is not today’s anticipated rate hike, but rather the additional policy tightening expected later this year. Warsh may therefore struggle to deliver a message that aligns with the aggressive pricing currently seen in the markets.

“Tomorrow’s Fed meeting is a nightmare for Warsh. There’s no way he can live up to all the hikes priced, so the press conference will likely disappoint markets. The Dollar is likely to fall and long yields likely to rise,” Brooks said.

A weaker dollar typically supports dollar-denominated assets, including bitcoin and gold, reflecting a well-documented negative correlation between digital assets and the U.S. Dollar Index (DXY). Further, as Brooks noted, longer-duration Treasury yields are likely to rise if the press conference disappoints.

The yield catalyst

While rising yields are traditionally a bearish signal for non-yielding assets like bitcoin and gold, some observers note that the underlying driver matters. In this instance, yields are expected to climb due to an inflation signal from the Federal Reserve rather than an optimistic economic growth outlook, a crucial distinction that alters the typical market playbook.

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According to a JPMorgan scenario analysis shared by Barchart, if the Fed hikes rates without delivering explicit, hawkish forward guidance, investors could conclude that current monetary policy remains too accommodative, prioritizing economic growth over restraining inflation.

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Bitcoin, Ethereum ETFs Bleed $592 Million as Clarity Act Fails in Senate

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Crypto ETFs' Performance on September 15.

Bitcoin (BTC) and Ethereum (ETH) spot ETFs shed a combined $592 million on September 15. Both products posted their deepest single-day outflows in months.

The outflows landed as the CLARITY Act failed to advance in the US Senate. The setback pulled prices lower, and capital followed them out.

Ethereum ETFs Record Their Worst Session Since January

Ethereum (ETH) funds lost $141.47 million, their largest daily outflow since January 30, according to SoSoValue data.

Nothing in that stretch came close. The worst session in between drained $136.4 million on March 19.

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The selling followed four straight weeks of inflows. ETH products took in $1.94 billion over that run, peaking at $824.4 million in late August.

Bitcoin funds gave up $450.33 million, their worst session since June 25. Outflows hit $462.7 million last week, the heaviest since early July, after three weeks of heavy buying.

Trading volume told the same story. Bitcoin products saw turnover of $4.35 billion, compared with a 30-day average of $2.74 billion. Ethereum volume more than doubled its own baseline.

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Altcoin Funds See Mixed Performance

Hyperliquid (HYPE) was the only altcoin product to record an outflow. Its funds lost $3.89 million, extending a September decline of $18.04 million.

Four funds drew money in. Solana (SOL) ETFs led with $1.35 million. Tron (TRX), Dogecoin (DOGE), and Hedera (HBAR) added less than $500,000 each.

Crypto ETFs' Performance on September 15.
Crypto ETFs’ Performance on September 15. Source: BeInCrypto/SoSoValue

Six funds recorded no activity at all. BNB (BNB) XRP (XRP), Chainlink (LINK), Avalanche (AVAX), Polkadot (DOT), and Litecoin (LTC) all logged zero flows. The 11 altcoin funds ended the day with a combined net outflow of $1.66 million. They hold $3.55 billion between them.

Both ETH and BTC ETFs still sit in positive territory for September. Bitcoin funds hold a $17.1 million net gain month to date, while Ethereum funds carry $307.4 million. One session, however heavy, has not erased the month.

The Federal Reserve announces its rate decision on Wednesday, a second policy test within 24 hours.

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The post Bitcoin, Ethereum ETFs Bleed $592 Million as Clarity Act Fails in Senate appeared first on BeInCrypto.

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