XRP has decreased by nearly 10% and reached a price of $1.30 in the early hours of Wednesday, Asian time. This drop is the most severe performance among major cryptocurrencies and is due to the lack of progress on the Clarity Act in the Senate.
Cryptocurrency Market Analysis
Alongside XRP, Ethereum has also dropped nearly 5% to around $2,410. Solana and Dogecoin fell by approximately 5% and nearly 5%, reaching prices above $97 and about $0.07, respectively. Other cryptocurrencies like Zcash and HYPE each experienced a decline of close to 4%. Bitcoin also saw a drop of nearly 3%, reaching a price of around $76,000. BNB and Tron had the least decline at about 1%.
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Reasons for the Failure of the Clarity Act
The Clarity Act failed with a vote of 49-50 in the Senate. This vote required 60 votes from senators to proceed to discussion and several Republican senators voted against the proposal. The text of this bill was over 600 pages long, and the main clause that led to its failure concerned ethical regulations aimed at preventing senior government officials from maintaining cryptocurrency business interests.
Senator Alyssa Slotkin, a Democrat from Michigan, stated that she voted against the bill due to its weak ethical regulations. She pointed to the significant earnings of former President Donald Trump and his family from cryptocurrency activities and added that the Commodity Futures Trading Commission does not have enough personnel to enforce this law, and the bill has weaknesses regarding money laundering and terrorism financing.
On the other hand, cryptocurrency stocks were also affected by these developments. The stock price of Coinbase fell nearly 9% to $174.42, and Circle dropped over 9% to $88.26. Galaxy Digital and Gemini also decreased by 8% and 7%, respectively. Other stocks like Bullish and Riot Platforms each fell by 5%, and eToro dropped by 4%.
Attention is now focused on regulatory bodies that this bill aimed to restrict. The Securities and Exchange Commission is working on the proposed Reg Crypto framework and rules, which is seen as the only path to assure the industry from Congress. Political committees like Fairshake must decide how to deal with the senators who voted against it before the November 3 elections.
Finally, the Federal Reserve will also make its decision on rates today, and given the current market conditions, a rate increase of a quarter percent is expected.
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