Bitcoin and crypto-linked stocks face a bearish outlook after the U.S. Senate blocked key digital asset legislation, sparking record ETF outflows and heightening sensitivity to upcoming Federal Reserve rate decisions.
Bitcoin price dropped 4% and ETF outflows surged after the Clarity Act failed, signaling bearish regulatory sentiment.
Coinbase shares fell sharply as the failed crypto legislation dampens the outlook for exchange-related revenues.
Strategy (MicroStrategy) declined on the regulatory setback, given its large Bitcoin holdings and crypto market sensitivity.
Bitcoin prices retreated 4% to $75,850 after the U.S. Senate failed to advance the Digital Asset Market Clarity Act. The legislative setback triggered $450 million in spot ETF outflows, the largest single-day redemption since June, while crypto-linked equities like Coinbase and MicroStrategy faced sharp selling pressure.
The legislation failed to advance because it received 50 votes in favor and 49 against, falling short of the 60-vote threshold required to move forward in the U.S. Senate.
The market is focused on the U.S. Federal Reserve's interest rate decision, with traders pricing in a 92% probability of a 25 basis point hike to combat inflation.