Bitcoin prices fell on Wednesday after the U.S. Senate blocked a major cryptocurrency regulatory bill, while caution ahead of the Federal Reserve’s policy decision added to pressure on digital assets.
Bitcoin dropped 0.83 percent to $76,319 by 11:51 GMT, extending losses from the previous session after the Senate voted 49-50 against advancing the Clarity Act.
The legislation, which had been strongly supported by the Donald Trump administration, was designed to establish a broader regulatory framework for the U.S. cryptocurrency industry.
Cryptocurrencies sell off following Senate vote
The Senate decision dealt another setback to efforts to provide greater regulatory clarity for digital assets. The bill had faced prolonged delays over disagreements surrounding measures to prevent insider trading by federal officials, as well as provisions concerning stablecoin yield payments.
While Tuesday’s vote does not rule out the legislation being reconsidered in a future session, prospects for near-term passage have weakened.
Bitcoin and other cryptocurrencies sold off sharply following the Senate vote, as investors had viewed the Clarity Act as a potential step toward greater regulatory legitimacy for the industry.
Some crypto industry figures have argued that U.S. regulators could establish similar rules without congressional legislation. Coinbase CEO Brian Armstrong said the Securities and Exchange Commission and the Commodity Futures Trading Commission could still develop comparable regulatory frameworks.
However, regulatory measures implemented without congressional action could remain vulnerable to changes in the political environment and future administrations.
Broader market pressures also weighed on Bitcoin and other cryptocurrencies, with rising Treasury yields and heightened geopolitical tensions in the Middle East adding to risk-off sentiment.
Fed decision in focus
Investor caution ahead of the Federal Reserve’s policy decision later Wednesday also weighed on Bitcoin and digital assets. The central bank is widely expected to raise interest rates by 25 basis points, with markets focused on Chair Kevin Warsh’s guidance on the outlook for monetary policy.
Warsh has repeatedly emphasized the Fed’s commitment to its 2 percent inflation target. With U.S. inflation still above that level, his guidance could point to a relatively firm approach to interest rates.
Higher borrowing costs generally weigh on speculative assets such as cryptocurrencies by reducing their appeal relative to traditional investments and tightening financial conditions.
Major cryptocurrencies decline
The broader cryptocurrency market also moved lower.
Ether, the second-largest cryptocurrency by market capitalization, fell 2.26 percent to $2,420.69, while XRP dropped 7.51 percent to $1.2961, extending its losses following the Senate vote.
Solana and Cardano declined 2.82 percent and 4.74 percent, respectively, while BNB slipped 0.59 percent.
Among memecoins, Dogecoin fell 2.78 percent, while $TRUMP tumbled 0.66 percent.
