Bitcoin fell below $98,000 on Thursday as institutional investors trimmed positions despite the passage of the CLARITY Act, which provides long-awaited regulatory clarity for crypto assets. The 10-year Treasury yield surged past 4.5%, attracting capital away from risk assets as the Federal Reserve signals sustained higher rates.
Spot Bitcoin ETF outflows reached their most severe pace since February, with investors withdrawing roughly $500 million in a single day. Analysts characterize the selling as profit-taking rather than capitulation, noting that Bitcoin remains elevated compared to year-ago levels. The regulatory win from CLARITY failed to sustain momentum as macro headwinds overpowered crypto-specific bullishness.
The CLARITY Act, which establishes federal jurisdiction over digital assets and excludes most tokens from securities regulation, addressed a major pain point for the industry. Industry leaders celebrated the passage as a watershed moment for Bitcoin and Ethereum, yet the market's muted response highlights how sensitive crypto markets remain to broader economic conditions.
Treasury yields command attention because they represent risk-free returns that compete directly with volatile assets like Bitcoin. A 4.5% yield on government debt becomes increasingly attractive to institutional allocators managing large portfolios. Several analysts noted that rising yields typically precede periods of weakness for Bitcoin, particularly when yields move alongside expectations for higher-for-longer interest rates.
On-chain data shows whale accumulation continued despite price weakness, suggesting long-term investors view dips as buying opportunities. Bitcoin miners also increased hodling activity, signaling confidence in higher prices ahead. These dynamics suggest institutional selling remains tactical rather than strategic capitulation.
The dichotomy between regulatory clarity and price weakness underscores a market reality: macro factors now dominate crypto price action more than regulatory catalysts. Until Treasury yields stabilize below 4%, Bitcoin faces headwinds that no single legislative win can overcome. The CLARITY Act establishes the foundation for institutional adoption, but execution depends on the broader economic backdrop improving first.