US Stock Crypto Stocks Bucking the Trend with Overall Gains, FIGR Up 13.78%, GEMI Up 4.59%

Crypto stocks Coinbase and Robinhood fell sharply on Jan. 16 amid uncertainty over the U.S. Senate's delayed markup of the CLARITY Act according to Yahoo Finance. The legislation, aimed at providing a clear regulatory framework for digital assets, faced renewed scrutiny after Coinbase CEO Brian Armstrong withdrew support, citing concerns over provisions related to DeFi and stablecoin rewards according to Yahoo Finance. Robinhood CEO Vlad Tenev, by contrast, pushed for the bill's passage, arguing it would unlock new product opportunities according to Yahoo Finance.

Bitcoin and ether both rose on the week, with Bitcoin crossing $95,000 and ether posting a 6.6% gain according to CoinTelegraph. Despite regulatory uncertainty, U.S. spot Bitcoin ETFs saw a rebound, with $1.7 billion in inflows over four days according to CoinTelegraph. Investors are closely watching whether the CLARITY Act's stalled progress will impact broader market sentiment according to CoinTelegraph.

Bitcoin mining stocks, including Riot Platforms and Galaxy Digital, gained momentum as companies announced expansion plans and major deals according to The Block. Riot Platforms signed a decade-long deal with AMD, potentially generating $1 billion in revenue, while Galaxy Digital secured an 830 MW power connection in Texas according to The Block. The moves reflect growing interest in high-performance computing and AI infrastructure in the U.S. according to The Block.

Why Did This Happen?

The CLARITY Act's delayed progress has created market uncertainty, particularly for companies like Coinbase and Robinhood according to Yahoo Finance. The bill's current draft includes provisions that critics say weaken consumer protections and shift regulatory power from the SEC to the CFTC according to Yahoo Finance. Coinbase's withdrawal of support on Jan. 14 led to the postponement of a Senate Banking Committee markup hearing according to Investopedia.

Supporters of the bill, including Kraken and Ripple, argue it fosters U.S. innovation and competitiveness according to Yahoo Finance. However, concerns over DeFi privacy, tokenized equities, and stablecoin rewards continue to divide stakeholders according to Yahoo Finance. The bill's Senate version includes changes that have fueled controversy, particularly around its implications for decentralized finance according to Yahoo Finance.

How Did Markets React?

Despite the uncertainty, Bitcoin and ether rose on the week, with Bitcoin reaching a seven-week high according to CoinTelegraph. U.S. spot Bitcoin ETFs saw a rebound in inflows, suggesting that institutional investors remain bullish despite regulatory delays according to CoinTelegraph. The broader crypto market gained 0.75% over 24 hours, pushing off the 50-day moving average according to Investing.com.

Crypto stocks, however, were more mixed. While Coinbase and Robinhood fell, companies like Marathon Digital and IREN rose according to The Block. The divergent performance highlights how different segments of the crypto industry are affected by regulatory developments according to The Block.

What Are Analysts Watching Next?

Analysts are closely watching whether the Senate will revise and advance the CLARITY Act according to Yahoo Finance. If lawmakers make changes to address industry concerns, companies that stand to benefit from the legislation could see a faster recovery according to Yahoo Finance. The bill's final version could have long-term implications for how digital assets are regulated in the U.S. according to Yahoo Finance.

Investor sentiment remains cautious, with some analysts suggesting that optimism about a Q1 breakout is fading according to Investing.com. Market participants are also watching for further developments in the crypto policy landscape, particularly as more companies seek regulatory clarity according to Investing.com.

The CLARITY Act's stalled progress also raised questions about the broader market's ability to sustain its recent gains according to CoinTelegraph. While Bitcoin and ether have shown resilience, the path to a sustained recovery will depend on legislative and regulatory outcomes in Washington according to CoinTelegraph.

Bitcoin's rebound, combined with positive ETF flows, suggests that demand for digital assets remains strong according to CoinTelegraph. However, the long-term success of the crypto market will depend on how lawmakers and regulators address the industry's evolving needs according to CoinTelegraph.