Cryptocurrency stocks fell sharply on Tuesday after the Senate failed to advance the Clarity Act. This move is seen as a significant blow to an industry that has spent years and hundreds of millions of dollars seeking a comprehensive regulatory framework in the United States.
Significant Decline in Cryptocurrency Stocks
Shares of Coinbase dropped nearly 9 percent to $174.42. Additionally, Circle, which issues stablecoins, saw a 9.4 percent decline to $88.26. Galaxy Digital experienced an 8 percent drop, while Gemini fell by 7 percent.
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Widespread Decline in the Market
The declines did not stop there and spread to other sectors of the market. Robinhood's stock fell by 3 percent to $110.01, while Bullish dropped by 5 percent and eToro by 4 percent.
Among cryptocurrency miners, Riot Platforms fell by 5 percent to $19.73. Other companies like MARA Holdings and CleanSpark also lost between 3 to 4 percent of their value.
These declines occurred after the Senate voted 49 to 50 against a procedural move to advance the Clarity Act, which was clearly less than the 60 votes needed for progression.
This bill could have established rules for how to handle cryptocurrencies and blockchain projects in the United States and granted the Commodity Futures Trading Commission (CFTC) more authority in cryptocurrency markets. The failure to pass this law means that the industry must wait longer for legislation that many companies need for long-term planning in the United States.
However, the Senate vote alone was not responsible for the price declines. Market conditions on Tuesday were also influenced by investors seeking to reduce risk ahead of the Federal Reserve's decision on Wednesday. This decision is expected to likely lead to an interest rate hike.
Meanwhile, the price of Bitcoin has also dropped about 3 percent in the past 24 hours, nearing $75,000. Traditional markets like Nasdaq and S&P 500 are also in negative territory.
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