Crypto Stocks Drop 5% Ahead of Senate CLARITY Act Vote
Circle shares fell 5.56% in pre-market trading as the US Senate prepares to vote on the CLARITY Act. Bitcoin dropped below $77,000 amid rising oil prices and bond yields.
Circle shares fell 5.56% in pre-market trading on Tuesday. This move led a broader decline across crypto-linked equities. Investors reacted to the upcoming Senate vote on the CLARITY Act.
Strategy, Coinbase, and Robinhood shares dropped between 3% and 4%. The sector erased most of Monday's gains. Bitcoin price slipped below the $77,000 threshold.
Macro Headwinds Pressure Risk Assets
Brent crude oil prices rose above $108 per barrel. This surge contributed to the selling pressure in equities. The US 10-Year Treasury yield climbed above 5%.
The bond yield level is the highest since 2007. JPMorgan and Goldman Sachs now expect a 25 basis point Fed rate hike this week. This would be the first increase since 2023.
Senate Cloture Vote Requires Bipartisan Support
The Senate will vote on cloture at 2:15 p.m. ET. This vote is not a final passage of the bill. Invoking cloture requires 60 votes.
Republicans hold 53 seats in the chamber. They need support from Democratic senators to proceed. Failure to achieve cloture would likely sideline the CLARITY Act for the remainder of this Congress.
Ethics Provisions Trigger Democratic Rejection
Democrats rejected the latest draft of the crypto legislation. Senators Mark Warner and Elizabeth Warren cited vague language regarding ethics provisions. They also raised concerns about state Attorney General powers.
Critics argued the text failed to adequately cover the crypto interests of the President and his family. This dispute created uncertainty ahead of the scheduled vote. According to GN markets/crypto (en-US), these political hurdles are the primary driver of the current sell-off.
