Bitcoin extended its decline on Tuesday after the CLARITY Act failed to advance in the US Senate.
Crypto market sentiment was already under pressure from rising US Treasury yields and higher oil prices. Both developments strengthened expectations that the Federal Reserve could raise interest rates.
Bitcoin fell around 3.8% to $75,748 by late Tuesday trading.
CLARITY Act Fails to Advance in Senate
The Digital Asset Market Clarity Act failed to clear a key procedural hurdle in the US Senate.
The cloture motion received 49 votes in favor and 50 against, falling short of the 60 votes required to advance the legislation.
The CLARITY Act aims to establish a clearer federal regulatory framework for cryptocurrencies and other digital assets.
The legislation had previously advanced through the Senate Banking Committee in May by a bipartisan 15–9 vote. However, disagreements continued over several key provisions.
Crypto Regulation Remains a Key Issue
One of the major areas of disagreement involves how regulatory authority over digital assets should be divided between the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC).
Lawmakers have also debated how the legislation should address yield payments on stablecoins and ethics rules involving government officials.
Senator Cynthia Lummis, one of the leading supporters of the legislation, criticized the outcome following Tuesday’s vote.
Lummis argued that supporters had made changes to address concerns raised during negotiations, while opponents continued to seek additional revisions.
Crypto Industry Reacts to Senate Setback
Some cryptocurrency companies took a more measured view of the failed Senate vote.
Strategy, one of the largest corporate holders of Bitcoin, argued that Bitcoin’s legal status in the United States does not depend entirely on the CLARITY Act.
Blockchain infrastructure provider tZERO also said the vote did not alter the broader shift toward regulated digital asset markets.
The company pointed to other possible regulatory paths, including rulemaking and greater coordination between the SEC and CFTC.
Treasury Yields and Oil Prices Pressure Bitcoin
The CLARITY Act vote was not the only factor weighing on cryptocurrency markets.
Risk appetite was also hit by rising Treasury yields and oil prices ahead of the Federal Reserve’s latest monetary policy decision.
Markets were pricing in a strong probability of a 25-basis-point Fed rate hike, following a sharp increase in expectations over the previous week.
Higher interest rates can put pressure on Bitcoin and other speculative assets because they increase the appeal of lower-risk, interest-bearing investments.
US Treasury Yield Climbs Above 5%
The benchmark 10-year US Treasury yield rose to around 5.0% on Tuesday, reaching levels not seen since 2007.
Higher yields have been driven by persistent inflation concerns, stronger energy prices and a broader selloff in global bond markets.
Investors have also focused on heavy spending on artificial intelligence infrastructure and growing US government debt.
Both issues have contributed to concerns over long-term borrowing requirements and inflation.
Oil Prices Surge on Supply Concerns
Energy markets added further pressure to the inflation outlook.
Brent crude futures climbed around 2.7% to $108.51 a barrel, while US West Texas Intermediate crude gained approximately 4.1% to $105.52.
The rally followed reports of supply disruptions involving a major Saudi Arabian Red Sea port and halted production at several Libyan oilfields.
Rising energy costs can contribute to broader inflation, potentially increasing pressure on central banks to maintain tighter monetary policy.
Fed Decision Could Drive Bitcoin’s Next Move
Attention now turns to the Federal Reserve’s interest rate decision.
Markets have increasingly expected the central bank to deliver its first rate increase in more than three years.
The policy decision comes as inflation remains elevated and energy prices continue to rise.
President Donald Trump has publicly called for lower US interest rates, while Federal Reserve Chair Kevin Warsh faces the challenge of balancing those political demands against inflation risks and economic data.
For Bitcoin, the Fed’s decision and its guidance on future interest rates could become the next major catalyst for price action.
Robinhood Employees Face Fraud Charges
Elsewhere in the cryptocurrency sector, US prosecutors announced fraud charges against two Robinhood Markets engineers.
The US Attorney’s Office for the Southern District of New York charged Hefu Chai and Huaisong Xiang with commodities fraud and wire fraud.
Prosecutors allege that the employees misused confidential Robinhood information to trade perpetual futures on Hyperliquid before certain cryptocurrency listings were publicly announced.
The charges remain allegations, and both defendants are presumed innocent unless proven guilty.
Altcoins Fall Alongside Bitcoin
Most major altcoins also moved lower as weakness spread across the cryptocurrency market.
Ether fell around 5.7% to $2,401.82, while XRP dropped approximately 10.9%.
Solana declined 6.1%, Cardano lost 7.2%, and BNB slipped around 1.5%.
Memecoins were also under pressure, with Dogecoin falling 5.2% and TRUMP declining roughly 7.4%.
The combination of regulatory uncertainty, higher bond yields and expectations for tighter Federal Reserve policy has left the broader crypto market under significant pressure.
