Crypto markets faced fresh pressure on Tuesday after the Digital Asset Market Clarity Act failed to secure enough Senate support to advance.
Bitcoin fell below $76,000, while rising oil prices added to inflation concerns ahead of the Federal Reserve’s interest-rate decision.
Gold also declined as the stronger dollar and higher Treasury yields reduced demand for the non-yielding asset.
Clarity Act fails to advance in Senate
The Digital Asset Market Clarity Act failed to receive the 60 votes required to move forward in the US Senate on Tuesday.
Although the vote represented the furthest the legislation had progressed, the result was a setback for the crypto industry after years of lobbying and hundreds of millions of dollars in spending.
Negotiators from both parties had worked on more than 600 pages of compromise legislation.
However, disagreements over provisions including restrictions on senior government officials maintaining ties to crypto businesses proved difficult to resolve.
Republican Senator Cynthia Lummis made a final appeal before the vote but was unable to secure sufficient support.
The defeat could send the legislation back to the drawing board unless lawmakers find a way to revive the process before the congressional session ends.
The industry may now focus more heavily on the Securities and Exchange Commission and the Commodity Futures Trading Commission, which are developing regulatory initiatives for digital assets.
However, SEC Chairman Paul Atkins has warned that regulatory guidance and exemptions may not be durable without legislation supporting them.
Bitcoin falls ahead of Fed decision
Bitcoin fell as much as 4.9% from Monday’s high of nearly $80,000 after the Clarity Act vote failed.
The cryptocurrency traded around $75,960 on Tuesday afternoon, down 3.8% over 24 hours, after reaching an intraday low of $75,700.
Ethereum declined 3.9% to approximately $2,440.
Bitcoin also remained under pressure ahead of Wednesday’s Federal Reserve decision.
The CME Group’s FedWatch tool showed a 92% probability of a quarter-point rate increase, up from 59.4% a week earlier and 33.1% a month earlier.
A quarter-point increase would lift the Fed’s target range from 3.50%-3.75% to 3.75%-4%.
However, Bitmine Immersion Technologies Chairman Tom Lee and MNFund founder Michael van de Poppe argued that a hike was unlikely.
Van de Poppe said markets could remain volatile as the Clarity Act vote and Federal Open Market Committee meeting overlap.
He added that he would consider buying further declines and said Bitcoin could target $90,000-$92,000 if it reclaims $78,000.
Oil prices rise as supply risks intensify
Oil prices climbed after Saudi Arabia reportedly cancelled some shipments following the closure of a key export pipeline after drone attacks.
West Texas Intermediate gained 4.2% to $105.61 a barrel, after hitting $106.75 earlier in the session, its highest price since May 19.
Brent crude futures rose 2.4% to $108.30. Prices have gained more than 20% this month as fighting in the Persian Gulf intensified.
Reuters reported that Saudi Arabia had informed European customers that some September crude deliveries were cancelled.
Riyadh described the pipeline shutdown as a precautionary measure, while Energy Secretary Chris Wright said he expected operations to resume within days.
The pipeline can transport up to 7 million barrels per day and has been used to redirect exports towards the Red Sea as the US and Iran contest control of the Strait of Hormuz.
Goldman Sachs strategist Yulia Zhestkova Grigsby said the attacks on oil infrastructure increased the probability of Brent crude rising above $120.
Gold slips as yields and dollar strengthen
Spot gold was almost unchanged at $4,302 an ounce, while US gold futures settled 0.2% lower at $4,339.95.
StoneX strategist Daniel Pavilonis said higher energy prices could fuel inflation and increase expectations for higher interest rates, creating further pressure on gold.
The US dollar strengthened, making gold more expensive for overseas buyers, while 10-year Treasury yields reached their highest level since 2007.
Higher yields also reduce the appeal of gold because the metal does not generate income.
ING analysts said much of the hawkish Federal Reserve risk appeared to be priced in, but warned that gold could remain vulnerable if policymakers signal that interest rates will stay higher for longer.
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