Bitcoin's price jumped above $81,000 on Friday, trading as high as $81,055 during morning hours in New York before settling around $80,982. The surge represents a gain of nearly 6% over the previous 24 hours.
The rally came despite significant headwinds for the digital asset industry. On Tuesday, lawmakers blocked the Clarity Act, long-awaited legislation that would have divided cryptocurrency regulatory oversight among multiple agencies. The Federal Reserve also raised interest rates on Wednesday for the first time, citing elevated inflation concerns.
Federal Reserve Chair Kevin Warsh stated that price stability remained the central bank's top priority, noting that "inflation is too high, and has been for too long." Warsh added that recent summer inflation readings suggested underlying trends had not meaningfully improved.
Bitcoin's price initially declined following news of the Clarity Act blockage and the Fed's rate increase, but recovered sharply on Friday. Historically, bitcoin has performed well in low interest rate environments due to increased liquidity in financial markets.
Bitcoin exchange-traded funds in the United States experienced net negative flows for most of the week, with investors withdrawing approximately $427 million from the vehicles. However, flows turned positive on Thursday, with investors adding nearly $160 million following two consecutive days of outflows.
Asset manager Grayscale suggested in a Thursday research note that the Fed's decision was unlikely to harm bitcoin's price, characterizing the move as a mid-cycle adjustment rather than a cyclical shift. Additionally, despite lawmakers blocking the Clarity Act, regulatory bodies including the SEC have continued advancing pro-cryptocurrency regulations.
