Bitcoin gave back Monday's rally on Tuesday as betting odds on the Clarity Act becoming law this year halved overnight, ahead of a Senate cloture vote on the bill. Democrats and Republicans remain split over ethics language on officials' crypto holdings, while a separate House tax package advancing the same week leaves out a deferral miners and stakers had sought.
Bitcoin slides as Clarity Act odds fade
Bitcoin dropped 1.7% since midnight UTC to $76,862, unwinding Monday's rally to $79,427 and leaving the token 6.6% below its Sept. 4 high of $82,284. Ether fell 1.6% to $2,474.76, and solana lost 2% to $100.43.
Polymarket odds on the Clarity Act being signed into law this year reached 34% on Monday before sliding back to 17%, tracking the price reversal. The drop followed news that Democrats had crafted a counterproposal after rejecting a revised Republican draft circulated on Sunday. Ninety-two of the CoinDesk 100 constituents traded lower on the day.
Senate vote hinges on officeholder limits
The Senate is due to vote at 2:15 p.m. ET on whether to invoke cloture on the bill, which needs 60 votes to advance. A failure would likely shelve market-structure legislation until after the November midterms.
According to Reuters, Can-Luca Köymen, investment strategist at Sygnum, said: "Another delay would be negative but probably not a new regime shock".
The sticking point is ethics language governing officials' crypto holdings, not the market-structure provisions. Democrats have pushed for stricter limits on public officeholders profiting from crypto ventures, a push aimed in part at Trump's meme coin and World Liberty Financial, the crypto company run by his sons; Trump disclosed in June that he had made $1.4 billion off his crypto ventures.
Under the revised text, state attorneys general gain more enforcement power, and officials would need to divest crypto holdings or place them in a blind trust. Banking groups panned the new draft on Monday, saying it still lets stablecoins compete with bank deposits.
House panel takes up a separate tax package
The House Ways and Means Committee will consider a 114-page crypto tax bill on Wednesday that omits a provision letting miners and stakers defer tax on rewards until sale. Without it, rewards stay taxable when received. The Digital Asset Tax Certainty Act would still classify blockchain validator income as ordinary income and exempt gains on crypto used to pay fees up to $10, while letting qualifying trusts stake digital assets without losing trust status.
Sources: CoinDesk, Investing.com, Cointelegraph
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