Bitcoin Plummets 15% to $115,222 as Key Crypto Bills Fail in House

Bitcoin experienced a sharp decline, plummeting to $115,222, following the failure of three significant cryptocurrency bills in the House. These bills, endorsed by Trump, were designed to regulate the cryptocurrency market and provide a structured framework for its integration into the broader financial system. The defeat of these bills has introduced uncertainty among investors, triggering a sell-off in the cryptocurrency market.

The blocked bills were intended to address various facets of the cryptocurrency industry, including taxation, security, and consumer protection. The first bill aimed to establish clear guidelines for the taxation of cryptocurrency transactions, ensuring compliance with existing tax laws. The second bill focused on enhancing the security of cryptocurrency exchanges and wallets, aiming to protect investors from fraud and hacking. The third bill sought to provide consumers with greater protection against fraudulent activities and misleading practices in the cryptocurrency market.

The rejection of these bills has sparked concerns about the future of cryptocurrency regulation in the United States. Without clear guidelines, investors may be reluctant to enter the market, fearing potential legal and regulatory risks. This uncertainty could lead to further volatility in the cryptocurrency market, as investors react to changes in the regulatory landscape.

The drop in Bitcoin's price to $115,222 underscores the cryptocurrency market's sensitivity to regulatory developments. Investors closely monitor regulatory changes, as they can significantly impact the value of cryptocurrencies. The blocking of the bills has sent a clear message to the market that regulatory clarity is still a work in progress, and investors should be prepared for potential fluctuations in the value of their investments.

The rejection of the bills also highlights the challenges faced by lawmakers in crafting effective cryptocurrency regulations. The rapidly evolving nature of the cryptocurrency industry makes it difficult to create regulations that are both comprehensive and flexible. Lawmakers must balance protecting investors and fostering innovation in the cryptocurrency market.

Traders responded to the news by pulling profits. Bitcoin holders took $3.5 billion off the table in the past day, with over 56% of those being long-term wallet cashing out. This move indicates a shift in investor sentiment, as optimism that had been building for weeks was wiped away by the unexpected defeat of the bills.

The failed rule vote means the legislation, which needed House approval to move forward, is dead in the water… at least for now. The crash wiped away optimism that had been building for weeks. Bitcoin had been making back-to-back all-time highs recently, driven by heavy institutional buying of Bitcoin ETFs and the assumption that Congress was finally ready to play ball with the industry.

House Republicans had lined up three bills; one to regulate stablecoins, one to sort out the mess between the SEC and CFTC, and one to block the Federal Reserve from creating a central bank digital currency. But it all fell apart when 13 GOP members voted no. The first bill, the GENIUS Act, had already cleared the Senate last month and had some Democratic backing. It aimed to create a national framework for stablecoins. The second, called the CLARITY Act, would’ve decided if crypto assets fall under Gary Gensler’s SEC or the Commodity Futures Trading Commission. The third proposal sought to permanently ban the Fed from launching any government-backed digital currency. All three are now stalled.

The chaos hammered stocks, too. Riot Platforms dropped 3.3%, Mara Holdings fell 2.3%, and Coinbase slipped 1.5%. All three continued sinking in extended trading. Even Circle, the stablecoin issuer that went public with a bang last month, felt the blow. Shares of Circle fell 5% on the day.

By evening, leadership said there might be another vote. But no one could confirm if it’d be the same bills or a reworked version to win over the rebels. “Nothing’s finalized yet,” said Nancy Mace, a Republican House member who voted yes on the rule.