The Digital Asset Market Clarity Act failed to secure the 60 votes needed to advance in the U.S. Senate on Tuesday, a significant setback for the cryptocurrency industry after years of lobbying and substantial spending. The vote, which marked the furthest the legislation had progressed, saw bipartisan negotiators unable to resolve disagreements over provisions such as restrictions on senior government officials maintaining ties to crypto businesses.
Republican Senator Cynthia Lummis made a final appeal before the vote but could not gather enough support. The defeat may send the bill back to the drawing board unless lawmakers find a way to revive it before the congressional session ends. The industry may now shift its focus to the Securities and Exchange Commission and the Commodity Futures Trading Commission, which are developing regulatory initiatives for digital assets. However, SEC Chairman Paul Atkins has cautioned that regulatory guidance and exemptions may not be durable without legislative backing.
Bitcoin fell as much as 4.9% from Monday's high of nearly $80,000 following the vote, trading around $75,960 on Tuesday afternoon, down 3.8% over 24 hours. Ethereum declined 3.9% to approximately $2,440. The cryptocurrency market also faced pressure ahead of Wednesday's Federal Reserve decision, with the CME FedWatch tool showing a 92% probability of a quarter-point rate increase, up from 59.4% a week earlier and 33.1% a month earlier.
Some analysts, including Bitmine Immersion Technologies Chairman Tom Lee and MNFund founder Michael van de Poppe, argued that a hike is unlikely. Van de Poppe noted that markets could remain volatile as the Clarity Act vote and Federal Open Market Committee meeting overlap. He added that he would consider buying further declines and said Bitcoin could target $90,000-$92,000 if it reclaims $78,000.
Oil prices climbed after Saudi Arabia reportedly cancelled some shipments following the closure of a key export pipeline after drone attacks. West Texas Intermediate gained 4.2% to $105.61 a barrel, after hitting $106.75 earlier in the session, its highest price since May 19. Brent crude futures rose 2.4% to $108.30, with prices up more than 20% this month as fighting in the Persian Gulf intensified.
Reuters reported that Saudi Arabia had informed European customers that some September crude deliveries were cancelled. Riyadh described the pipeline shutdown as a precautionary measure, while Energy Secretary Chris Wright said he expected operations to resume within days. The pipeline can transport up to 7 million barrels per day and has been used to redirect exports towards the Red Sea as the U.S. and Iran contest control of the Strait of Hormuz. Goldman Sachs strategist Yulia Zhestkova Grigsby said the attacks on oil infrastructure increased the probability of Brent crude rising above $120.
Gold was almost unchanged at $4,302 an ounce, while U.S. gold futures settled 0.2% lower at $4,339.95. StoneX strategist Daniel Pavilonis said higher energy prices could fuel inflation and increase expectations for higher interest rates, creating further pressure on gold. The U.S. dollar strengthened, making gold more expensive for overseas buyers, while 10-year Treasury yields reached their highest level since 2007. Higher yields reduce the appeal of gold because the metal does not generate income.
ING analysts said much of the hawkish Federal Reserve risk appeared to be priced in, but warned that gold could remain vulnerable if policymakers signal that interest rates will stay higher for longer. For more on the legislative impact, see Coinbase's stock reaction and the Senate vote details. On oil, Brent's recent surge and supply fears remain key drivers.
This article is for informational purposes only and does not constitute financial advice.
