Crypto Markets Retreat Despite Legislative Optimism
Bitcoin (BTC) and shares of major crypto firms Coinbase (COIN) and Circle (CRCL) declined in midday trading on Monday, even as expectations grew that a revised version of the CLARITY Act could soon reach the Senate floor.
According to a note from TD Cowen cited by TheFly, lawmakers are expected to introduce an updated version of the bill this week, incorporating language from both the Senate Banking and Agriculture Committees. The firm projects the legislation could come up for a vote as early as the week of July 20.
Former President Donald Trump added to the momentum on Monday, urging the Senate via Truth Social to pass the CLARITY Act “in honor of Senator Lindsey Graham, a big supporter.” Trump warned that China and “many other countries” seek “complete and total control” over cryptocurrency and artificial intelligence, adding, “Don't let China win on either subject!!!”
Initially, Trump’s comments sparked a brief rally in CRCL and COIN shares, but gains quickly evaporated amid a broader pullback in digital assets. By midday, Circle’s stock had fallen 3.6%, while Coinbase dipped 0.75%.
Bitcoin dropped as much as 2.5% over the past 24 hours, trading around $62,500. Retail sentiment on Stocktwits shifted from “neutral” to “bearish” for BTC, though some traders remained optimistic—forecasting a potential rally to $75,000 if the CLARITY Act passes.
However, significant obstacles remain. The death of Senator Lindsey Graham (R-SC), a key Republican supporter, removes a crucial “yes” vote, tightening the margin for securing the 60 votes needed to overcome Senate procedural hurdles. Senate Minority Leader Mitch McConnell (R-KY) remains absent, further straining GOP cohesion.
Democratic opposition also looms large, with Senator Elizabeth Warren (D-MA) actively lobbying against the bill. Unresolved issues include the final wording of the Blockchain Regulatory Certainty Act (BRCA) provision and an ethics agreement addressing crypto-related conflicts of interest.
TD Cowen cautioned that while pressure mounts to advance the bill before the House recesses in August, the path to enactment has grown notably more difficult.