Bitcoin drops after US Senate blocks landmark crypto bill

Bitcoin's value plummeted on Tuesday and Wednesday as investors processed the loss of a highly anticipated bill, the CLARITY Act. The motion failed by a mere 11 votes, falling short of the 60 needed to advance. This defeat dealt a significant blow to those pushing for market structure legislation this year. The CLARITY Act, also known as the Digital Asset Market Clarity Act, aimed to divide the oversight of digital assets between the US Commodity Futures Trading Commission and the Securities and Exchange Commission, ending the current fragmented system.

Bitcoin's price dropped almost 34% over the past 24 hours, reaching below $76,000, while the token behind the decentralized exchange Hyperliquid, HYPE, fell about 4% to below $78. Most major tokens also saw declines. Despite concessions made by President Donald Trump, including ethics restrictions and a role for state attorneys general, the bill still couldn't secure the necessary votes.

Four Republicans joined the 45 Democrats in voting against it, with Democratic Senator Elizabeth Warren leading the opposition. The failure of the CLARITY Act suggests the crypto industry may have to wait until next year for clearer rules to be discussed, as the US midterm elections are approaching. Even without the bill, the SEC and CFTC are already crafting a framework for regulation, which could lead to more instability if future administrations alter these rules.