U.S. Senate Rejects Crypto Market Structure Bill; Bitcoin Tumbles Below $75,000

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The U.S. Senate on the 15th (local time) rejected a procedural vote to advance the CLARITY Act, a digital asset market structure bill, by a margin of 49 to 50. Disagreements over President Donald Trump’s crypto business conflicts of interest and stablecoin yield restrictions ultimately derailed the legislation. Immediately following the vote, Bitcoin plunged more than 5% intraday to $74,910, while related stocks including Coinbase and Circle posted double-digit declines. With the November midterm elections approaching, the prospect of legislation passing this year has effectively evaporated, shifting the burden of regulatory clarity to the SEC and CFTC—though observers note that administrative rules lack the durability of legislation.

Key Elements

The U.S. Senate’s rejection of a procedural vote to begin deliberation on the CLARITY Act, a digital asset market structure bill, sent Bitcoin tumbling below the $75,000 mark. Crypto-related stocks also fell sharply across the board as investor sentiment rapidly deteriorated.

The vote held on the Senate floor on the 15th (local time) tallied 49 in favor and 50 against—far short of the 60 votes needed to advance the bill. Four Republican senators joined all Democrats in voting against it, marking a failure to achieve bipartisan consensus.

While this vote does not represent a final rejection of the CLARITY Act itself, the prevailing assessment is that with less than two months before the November midterm elections, the possibility of passing legislation this year has effectively evaporated.

Market Reaction

Bitcoin plunged more than 5% intraday at one point, sinking to $74,910 (approximately 100 million won). This marked the largest intraday decline since June. Ethereum also crashed more than 8%, joining Bitcoin in posting its steepest drop of the year. Some altcoins, including Ripple’s XRP, fell even further.

Crypto-related stocks took a direct hit on the New York Stock Exchange. Coinbase (COIN) closed the regular session down 10.10% at $172.11 (approximately 240,000 won), while Circle (CRCL), the issuer of the USDC stablecoin, fell more than 11%. MicroStrategy (MSTR), the largest corporate holder of Bitcoin, also dropped more than 5% to close at $129.60 (approximately 180,000 won).

Mining stocks also weakened across the board. Riot Platforms fell 5.97%, with Marathon Holdings, CleanSpark, and other major miners all posting declines. Galaxy Digital and Gemini dropped 7.64% and 9.46% respectively, while Robinhood slipped 3.39%.

In the futures market, approximately $300 million (about 410 billion won) in bullish positions were forcibly liquidated in the hour leading up to the vote, triggering a cascade of leveraged long position unwinding.

Background of the Rejection

The CLARITY Act would have granted the Commodity Futures Trading Commission (CFTC) comprehensive regulatory authority over digital asset spot markets, while the Securities and Exchange Commission (SEC) would retain oversight of investment contracts and tokenized securities. The crypto industry has spent hundreds of millions of dollars on lobbying efforts over several years in support of the bill’s passage.

The most significant issue that derailed last-minute negotiations was the conflict of interest surrounding President Donald Trump’s crypto ventures. Democrats pointed out that President Trump has earned more than $1.4 billion (approximately 1.9 trillion won) through his family’s crypto businesses, demanding stronger ethics rules regarding public officials’ crypto holdings and divestment.

Republican Senate leadership released a roughly 630-page amendment on the night of the 13th, just before the vote, which included restrictions on federal officials issuing or endorsing digital coins and enhanced enforcement authority for state attorneys general on ethics rules. However, it failed to overcome Democratic opposition.

Another contentious issue was stablecoin yield regulation. Traditional banks strongly objected that if crypto firms were permitted to offer interest or rewards to stablecoin users, bank deposits could flee en masse. U.S. banking industry groups argued in a joint letter that “a circuit breaker that only activates after massive deposit flight has already occurred is no safeguard at all.”

Outlook

With the bill stalled, regulatory uncertainty in the crypto space is expected to intensify once again. The Trump administration can continue pursuing deregulation through the SEC and CFTC, but administrative rules are more susceptible to future changes than laws enacted by Congress.

Austin Campbell, adjunct professor at NYU Stern School of Business, noted that “with the bill’s failure, the ball is now in the regulators’ court,” adding that “regulators can make rules, but these lack the stability and permanence of legislation.”

Coinbase CEO Brian Armstrong said on X that “it’s disappointing that the CLARITY Act did not advance in the Senate today,” while adding that “the SEC and CFTC have the tools they need to create clear rules under their existing authority.” He added, “Either way, regulatory clarity is coming to the crypto market.”

Patrick Witt, President Trump’s senior crypto advisor, called the outcome “a very disappointing result” and pressured CFTC Chairman Michael Selig and SEC Chairman Paul Atkins, saying, “Now it’s your turn.”

Jasper De Maere, head of over-the-counter trading at Wintermute, predicted that “CLARITY Act legislation is done for this year, and the next realistic opportunity will come after a new Congress is seated.”

Robbie Mitchnick, head of digital assets at BlackRock, stated that “this outcome does not impact our current plans or strategy.” BlackRock operates IBIT, the largest spot Bitcoin ETF in the United States.

However, analysts suggest that traditional financial institutions’ expansion into new crypto businesses could face delayed decision-making due to prolonged regulatory uncertainty. Brian Dixon, CEO of Off the Chain Capital, explained that companies seeking large-scale acquisitions want a clearer regulatory environment.

Matt Hougan, Chief Investment Officer at Bitwise, assessed that while the CLARITY Act could have been a powerful catalyst for the crypto market in the fourth quarter had it passed, the bill’s failure is “more of a speed bump than a roadblock.”

Meanwhile, Michael Saylor, co-founder of MicroStrategy, drew attention after the failed vote by posting on X: “The only clarity you need is Bitcoin.” The post is interpreted as reflecting the perspective of investors who remain focused on Bitcoin’s long-term value despite regulatory uncertainty.

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Source: finance.biggo.com