Bitcoin Rebound Faces Fed, CLARITY Vote as ETF Demand Returns

Bitcoin's rebound is facing two major U.S. policy tests this week as investors await the Federal Reserve's rate decision and a key Senate vote on the CLARITY Act, while recent ETF flows point to increasingly selective institutional demand.

Bitcoin has recovered from its late-August slide toward $60,000, climbing back above $70,000. But the recovery remains under pressure as higher oil prices, inflation concerns and rising Treasury yields reinforce expectations for tighter U.S. monetary policy.

The backdrop follows a sharp selloff earlier in September. Bitcoin came under pressure as oil prices surged above $100, adding to concerns that an energy-driven inflation shock could constrain the Federal Reserve's policy options.

Fed and Congress Set the Next Tests

The Federal Reserve began its September 15–16 meeting on Tuesday, with markets increasingly pricing in a rate hike as inflation remains elevated and oil prices continue to rise. Morgan Stanley now expects the Fed to raise rates by 25 basis points this week and another 25 basis points in December, citing persistent inflation.

For Bitcoin, higher rates could reinforce pressure on risk assets by supporting the dollar and lifting bond yields. The U.S. 10-year Treasury yield has already moved above 5%, reaching its highest level since 2007 amid the broader bond-market selloff.

At the same time, the U.S. Senate is scheduled to hold a procedural vote Tuesday on the CLARITY Act, the market-structure bill intended to establish clearer rules around digital assets and the division of regulatory authority.

The vote requires 60 senators to invoke cloture and advance the legislation toward floor debate. Republicans released a revised version ahead of the vote containing 126 changes sought by Democrats, including additional restrictions concerning public officials' financial interests in crypto. Banking groups remain opposed to provisions that they argue could allow stablecoins to compete more directly with bank deposits.

A successful vote would not enact the CLARITY Act, but it would represent an important step for U.S. crypto regulation and could provide another source of support for digital-asset sentiment.

ETF Flows Show a More Selective Market

Institutional demand, meanwhile, is sending a more mixed signal.

U.S. spot Bitcoin ETFs recorded $462.7 million in net outflows last week, ending a three-week run of inflows. The withdrawals extended across all four trading sessions from September 8 to September 11, with Thursday alone accounting for $282.7 million of outflows, according to data from SoSoValue.

Ether ETFs moved in the opposite direction. The funds attracted $196.9 million in net inflows over the same period, with a $216.4 million inflow on Friday led by BlackRock's Ethereum ETF.

The divergence suggests that institutional positioning is not simply moving out of crypto. Instead, investors appear to be becoming more selective between major digital assets as markets approach the Fed decision and the Senate vote.

Bitcoin ETFs nevertheless remained in positive territory for September through September 11, with roughly $307 million in net inflows for the month despite the latest weekly reversal.

Bitcoin's Next Move Depends on Policy

Bitcoin's options market has also turned more bullish, with traders increasingly positioning for a move toward $80,000 or higher by December. But the cryptocurrency remains below its early-September high and faces a more difficult macro backdrop than it did during August's rally.

That leaves Bitcoin facing two different policy forces this week.

The Fed could reinforce the macro pressure on risk assets if it signals a more hawkish path for rates, while progress on the CLARITY Act could strengthen the regulatory case for institutional participation in U.S. digital assets.

ETF flows will provide another signal. A renewed pickup in Bitcoin fund demand could indicate that institutions are willing to look beyond near-term monetary tightening. Continued strength in Ether products, meanwhile, would suggest that institutional crypto exposure is becoming more differentiated rather than uniformly bullish.

For now, Bitcoin's recovery is caught between those competing forces, with the Fed decision and Senate vote likely to determine whether the latest rebound can extend beyond the $80,000 level or faces another round of selling pressure.