Crypto Markets Tumble After Senate Rejects Clarity Act

Cryptocurrency markets and related stocks fell sharply on Tuesday after the U.S. Senate failed to advance a key piece of legislation aimed at creating a federal regulatory framework for digital assets. The setback for the industry came as investors also weighed the Federal Reserve's upcoming interest rate decision. The Senate voted 49-50 on a procedural motion to advance the Clarity Act, falling short of the 60 votes needed to proceed. The bill was designed to establish clear rules for the digital asset market, delineating which cryptocurrencies and blockchain projects fall under the jurisdiction of the Commodity Futures Trading Commission and which fall under the Securities and Exchange Commission. The failed vote triggered a broad selloff across crypto assets. Bitcoin dropped to around $75,758, while Ethereum and Solana, which underpin sectors like stablecoins and tokenized assets that would have benefited from the legislation, fell more steeply. The total crypto market capitalization declined by approximately 3.7%. Crypto-linked equities experienced even steeper declines. Shares of Coinbase and Circle each fell about 10%, while Galaxy Digital dropped more than 8%.