U.S. crypto laws and the Federal Reserve’s next decision might set Bitcoin’s next big move, according to Grayscale in a new research note. The firm said Bitcoin’s recent decline is due to tighter rate expectations and uncertainty over the Digital Asset Market Clarity (CLARITY) Act in the U.S. Senate. The measure attempts to create a clear framework for digital asset markets, dividing oversight between the SEC and CFTC and outlining standards for exchanges and other organizations.
Bitcoin has already fallen considerably from its 2025 high and is now approaching a critical decision point, Grayscale said. Washington’s policy moves might determine whether this is a late-stage downturn or the beginning of a new leg downward, the business said. So investors are watching Congress and the Fed just as intently as on-chain data or technical indicators.
Base Case: CLARITY Passes and Fed Pauses
In its base case, Grayscale outlines a more hopeful path for Bitcoin. The firm says that “if the CLARITY Act passes the Senate, Strategy strengthens its balance sheet, and the Fed holds off on rate hikes, Bitcoin may be close to the cycle bottom.” Because Strategy, a major digital asset treasury holder, has faced leverage pressure, a stronger balance sheet would reduce the risk of forced selling.
Grayscale also links a potential recovery to the interest‑rate outlook. Its research note argues that “if we’re right, bitcoin’s price may catch up with stocks” if the Fed holds rates rather than tightening further. Since higher rates typically hurt risk assets, a pause could spur renewed demand for Bitcoin as investors regain confidence.
However, Grayscale also shows a clear negative scenario. It warns that if the CLARITY Act does not pass this year, Strategy and other DATs will further reduce their investments, and the Fed will have to raise rates as inflation continues to rise. In that case, digital asset treasuries might sell more Bitcoin to lower risk, putting more pressure on prices.
Grayscale’s head of research, Zach Pandl, cautions that “if downside risks materialize, we could see bitcoin fall moderately further.” He notes that a more hawkish Fed and sticky inflation have already pushed markets to price in possible hikes rather than cuts. As a result, Bitcoin’s path for the rest of the year may hinge on whether lawmakers deliver regulatory clarity and whether the Fed stays patient.
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