Crypto Market Reels as Senate Blocks CLARITY Act, Rate Hike Looms
The Senate's 49-50 vote against advancing the CLARITY Act sent shockwaves through the crypto market, causing Coinbase and Circle to plummet in value. The bill, which aimed to provide regulatory clarity for the industry, was a key focus for the two companies.
Coinbase fell 10.1% to $172.11, while Circle dropped 11.5% to $86.25. This translates to a combined market value loss of around $7.9 billion. Bitcoin also suffered, declining by 3.8% to about $75,500.
The CLARITY Act's failure does not impact the stablecoin income for Coinbase and Circle, which is tied to interest rates. In fact, a rate hike on Wednesday could add around $94 million a year to what Circle keeps. However, higher rates may continue to put pressure on crypto prices and trading.