Senate's CLARITY Act Failure Sends XRP Tumbling, Bitcoin Falters Slightly

The Senate's failure to advance the CLARITY Act sent shockwaves through the crypto market, with XRP tumbling nearly 8% and Bitcoin losing a mere 1.5%. The bill would have divided U.S. crypto oversight between the Securities and Exchange Commission and the Commodity Futures Trading Commission.

Rachael Lucas of BTC Markets noted that the legislation 'was never the binding constraint' for Bitcoin, suggesting that the market had already priced in regulatory uncertainty. In fact, Bitcoin's 90-day correlation with gold reached about 0.50 in early September, its highest level since 2020, indicating that the coin was trading more like a macro asset.

The sharper declines in XRP, Ethereum, and Solana indicate that the failed vote carried a larger regulatory risk premium for other parts of the crypto market. With U.S. spot Bitcoin ETFs holding about 6.35% of Bitcoin's circulating supply, a significant pool of passive BTC exposure was not directly affected by the bill.

Bitcoin faces pressure from rates, oil prices, and outflows in U.S. spot Bitcoin ETFs. Reclaiming the September 15 opening price at $78,189 would be 'the first sign the market is pricing out the regulatory discount', according to Lucas. However, a break below $74,000 would shift more attention toward oil, Treasury yields, and Federal Reserve policy.