Bitcoin Slumps as US Crypto Regulation Delays Bite

Bitcoin is struggling to gain momentum above $63,000 as the US Senate stalls on proposed crypto regulations. The largest cryptocurrency by market capitalization has retreated from around $65,000 at the start of last week, with investors facing delays to the Digital Asset Market Clarity Act (CLARITY Act) and weaker institutional fund flows.

The CLARITY Act aims to establish a clearer regulatory structure for cryptocurrency markets in the US. However, Senate Majority Leader John Thune has indicated that lawmakers intend to return to the legislation in September, leaving a narrowing window for Congress to reach an agreement this year.

Regulatory uncertainty was further compounded when the Securities and Exchange Commission (SEC) cancelled an open meeting scheduled for August 14. The meeting would have considered whether to propose a tailored offering regime for certain crypto assets, including potential exemptions designed to make it easier for cryptocurrency businesses to raise capital.

Institutional demand has also softened, with US spot Bitcoin ETFs recording approximately $389.7 million in net outflows between August 10 and August 14.