Bitcoin fell on Wednesday, extending overnight losses after the U.S. Senate rejected a key regulatory bill, while caution ahead of the Federal Reserve meeting added further pressure.
Cryptocurrency prices remained under pressure following the Senate's decision on Tuesday evening, amid concerns about escalating geopolitical tensions in the Middle East, along with rising Treasury bond yields.
Bitcoin fell 1.8% to $75,893.10 by 9:32 AM.
Bitcoin falls after Senate vote against transparency bill
Bitcoin fell overnight after the Senate narrowly voted (49 to 50) against passing the Clarity Act into law.
Most Republicans voted in favor of the measure, which the Donald Trump administration has long promoted as a comprehensive regulatory framework for cryptocurrencies in the United States.
However, the law was delayed for a long time due to ongoing disagreements over its handling of the issue of preventing insider trading by federal officials, as well as disagreements regarding its handling of stablecoin payouts.
Although the failure of the law to pass the Senate does not completely preclude the possibility of its passage in subsequent sessions, this scenario seems unlikely in the near term.
Bitcoin and cryptocurrency prices fell sharply following the vote, as the law was expected to give the industry greater regulatory credibility.
However, a number of cryptocurrency advocates, including Coinbase CEO Brian Armstrong, have argued that U.S. market regulators—particularly the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC)—are still able to establish similar regulations for cryptocurrencies without congressional approval.
However, these regulations remain subject to any fundamental changes in the political climate and the ruling administration.
Cryptocurrency prices today: Altcoins decline ahead of Fed decision
Aside from Bitcoin, cryptocurrency prices fell more broadly on Wednesday, as caution mounted ahead of the Federal Reserve's anticipated decision later in the day.
The central bank is widely expected to raise interest rates by 25 basis points, with all eyes on its chairman Kevin Warsh's guidance for the coming months.
Warsh has repeatedly affirmed his commitment to the Fed's 2% annual inflation target, which may imply a hawkish stance given that US inflation has significantly exceeded this level.
High interest rates cast a negative shadow on cryptocurrencies, as they reduce the appeal of investing in purely speculative and high-risk assets.
Ether, the world's second-largest cryptocurrency, fell 2.7% to $2,407.47, while XRP dropped nearly 7%, extending its sharp losses following the failure of the Clarity Act vote.
Solana and Cardano both fell by more than 3%, while BNB declined by 0.1%.
In the meme currency market, Dogecoin fell by 2.7%, and $TRUMP dropped by 4%.
