Bitcoin Tumbles on US Senate Rejection of Crypto-Friendly Clarity Act

Bitcoin dropped to a four-week low on Tuesday after the US Senate rejected the crypto-friendly Clarity Act, which would have established the first comprehensive statutory framework for digital currencies in the country. The bill fell 11 votes short of clearing a key procedural hurdle in the Senate, halting its progress and leaving rules vulnerable to revision whenever administrative leadership changes in Washington.

The rejection delivered an immediate blow to institutional sentiment, causing trading desks across Asia and Europe to pull back risk exposure. Digital asset markets are now searching for support as central bankers prepare their next policy announcement. The Federal Reserve interest-rate decision scheduled for later today will determine near-term dollar liquidity.

The Clarity Act was pitched as an essential foundation for corporate adoption and institutional custody services, but lawmakers clashed over specific provisions in the bill, preventing a final vote. Disagreements centered on ethics restrictions designed to bar government officials from profiting personally from digital asset holdings.