The Senate holds a cloture vote Tuesday on the Clarity Act, the crypto market structure bill that needs 60 votes to advance after months of deadlock over stablecoin yield and ethics provisions. Bitcoin has held up despite a hawkish macro backdrop, but analysts warn a failed vote could trigger a selloff while even a successful one risks a "sell the fact" pullback as attention turns to Wednesday's Fed decision.
The Senate is set to hold a procedural cloture vote Tuesday on the Clarity Act, the long-stalled bill that would build a new regulatory framework for cryptocurrencies. The vote needs 60 votes to overcome a filibuster, meaning at least seven Democrats would need to support it with full attendance.
Ethics language and stablecoin yield remain sticking points
Progress has been slow: the bill cleared the Senate Banking Committee in May but has since stalled. Banks say they cannot back the measure unless it curbs interest-like payments on stablecoin products, warning the current text could pull deposits out of community banks. Separately, most Democrats have withheld support until the bill adds stronger ethics language addressing President Donald Trump and his family's crypto holdings.
Republican leaders released updated bill text Sunday that they say reflects an ethics compromise brokered by Sens. Thom Tillis and Ruben Gallego, which Trump has agreed to, along with a provision letting state attorneys general enforce ethics rules on federal officials. The update also directs the Treasury secretary to restrict stablecoin rewards if community banks see substantial deposit flight. Sen. Cynthia Lummis, one of the bill's leaders, said: "It's a good bill, and it's time for it to become law."
Even so, the American Bankers Association and nearly 80 other banking groups wrote to Senate leaders Thursday urging further restrictions on stablecoin yield, and Sen. Chris Van Hollen said he cannot support the bill in its current form. Coinbase CEO Brian Armstrong remains bullish, saying that if the bill fails, the SEC and CFTC have signaled they are ready to publish their own rulemaking regardless.
Bitcoin's next move hinges on Tuesday's outcome
Bitcoin has stayed resilient over the past week despite hotter US inflation data and oil prices above $100, a combination that would typically weigh on risk assets. Traders now face a two-sided setup: a failed cloture vote would likely trigger a selloff, since it could close the legislative window for crypto market structure until after the November midterms. But even a successful vote could produce a "sell the fact" reaction, as focus shifts quickly to Wednesday's Federal Reserve rate decision.
On the daily chart, Bitcoin is bouncing off major support near $76,000, with buyers eyeing a move toward $82,500 resistance if that level holds.
Sources: CNBC, InvestingLive
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