War, interest rates, and legislative setbacks were overcome…Bitcoin reclaims $80,000, how far will the 'uneasy coin rally' go?

▲ Why did coins surge despite the Clarity Act being rejected? The market changed by SEC/institutional funds/AI generated image

Despite the confluence of the Iran war, international oil prices exceeding $100, the US Federal Reserve (Fed)'s interest rate hike, and the rejection of the Clarity Act, a US cryptocurrency market structure bill, the cryptocurrency market actually rebounded sharply. Bitcoin (BTC) reclaimed $80,000, and major altcoins like Ethereum (ETH), XRP (Ripple), and Solana (SOL) all surged. The negative factors that had suppressed the market have not disappeared. With institutional funds returning, the US Securities and Exchange Commission (SEC)'s 'Innovation Exemption' has sparked new regulatory expectations, leading to a market situation where good news outweighs bad news.

This rebound is even more notable because just a few days prior, the market environment was completely the opposite. On September 16, the Fed raised its benchmark interest rate by 0.25 percentage points to 3.75-4.00%, stating that inflation remained high. In the US Senate, the procedural vote for the Clarity Act failed 49-50, halting the bill's progress. Compounding this, concerns about oil supply due to the Iran war pressured risk assets. Although international oil prices have fallen for three consecutive days recently, Brent crude was still above $100, recording $103.17 per barrel on September 18, and West Texas Intermediate (WTI) at $101.30.

'SEC's One Shot' Stronger Than Bad News…Tokenized Stocks Changed the Game

The key factor that turned the tide was the SEC's regulatory move. Through a temporary and conditional innovation exemption announced on September 17, the SEC paved the way for Tokenized Securities Venues (TSVs) that meet certain requirements to trade tokenized US listed stocks using smart contracts deployed on public, permissionless distributed ledgers. The exemption expires after five years and comes with several conditions, including limits on trading instruments and volume, assurance of the same rights as traditional stocks, and trading transparency. Therefore, rather than a comprehensive deregulation of cryptocurrencies, it is closer to a measure that permits limited tokenized securities trading. However, it garnered market attention because the SEC created a real pathway for the on-chain capital market immediately after the Clarity Act's rejection.

SEC Chairman Paul Atkins also directly referenced the Clarity Act's lack of progress in Congress, explaining the innovation exemption as a step towards the on-chain transformation of the US capital market. In particular, the structure where smart contracts are deployed on public blockchains raised expectations that public blockchains like Ethereum could be utilized as infrastructure for trading and settling traditional financial assets. However, the SEC stated that this measure is a temporary mechanism for market observation rather than a permanent rule, and that it would review the need for further rulemaking. This means that while regulatory expectations have been revived, institutional uncertainty has not been completely eliminated.

Institutions Are Back…Bitcoin ETFs Switch to Net Inflow After Two Days of Outflows

It is difficult to explain this surge solely by regulatory tailwinds. Signals of institutional funds actually returning emerged simultaneously. US spot Bitcoin ETFs recorded a net inflow of $159.45 million on September 17, with BlackRock's IBIT receiving $183.66 million in a single day. The timing of Bitcoin spot ETFs reversing from previous outflow trends to net inflow, coinciding with the SEC's innovation exemption announcement, led the market to react more sensitively to institutional demand and regulatory changes than to interest rate hikes and the rejection of the Clarity Act. On September 18, Bitcoin broke past $80,000 and subsequently rose to over $81,000. Risk appetite rapidly spread to altcoins, with Solana rising approximately 11.7%, Ethereum 7.6%, and XRP 8.0%.

The Problem is 'Sustainability'…Oil Prices, Interest Rates, and ETFs Face Another Test

Whether this rally will lead to a sustained upward trend ultimately depends on 'how long the buying pressure that can ignore negative factors will last.' First, it's crucial whether the net inflow into Bitcoin spot ETFs is not just a one-day reversal. Simultaneously, even if international oil prices continue their recent decline, sustained high oil prices above $100 could re-ignite inflation concerns, and the Fed has not declared that tightening is over with this hike. The Clarity Act has also not passed; it failed to cross the congressional threshold. Conversely, the SEC's innovation exemption has created a new variable, suggesting that on-chain market expansion could proceed at the regulatory agency level, irrespective of the bill's rejection. Ultimately, the current crypto rally is a standoff between three burdens—geopolitics, interest rates, and legislation—and two upward drivers—institutional funds and tokenization. If Bitcoin holds $80,000 and ETF fund inflows continue, this rebound has room to spread further to altcoins. However, if oil prices and interest rates rise again, or if institutional funds withdraw once more, we must be wary of increased volatility that could reverse the sharp gains.

*Disclaimer: This article is for investment reference only, and we are not responsible for any investment losses based on it. The content should be interpreted for informational purposes only.*