Senate Kills Clarity Act, Bitcoin Slides as Fed Rate Decision Looms

The U.S. Senate dealt the crypto industry its sharpest legislative blow of the year on Tuesday, voting 49-50 to block the Digital Asset Market Clarity Act from advancing. The bill would have created a sweeping federal regulatory framework for the $2.3 trillion crypto industry, but it fell well short of the 60 votes needed to end debate. Growing Democratic opposition over President Trump's personal investments in the sector proved the deciding factor, and with midterm campaigning set to consume the remaining Senate calendar, the defeat effectively ends any clean 2026 path for comprehensive crypto market-structure legislation.

Markets absorbed the news swiftly and painfully. Bitcoin slipped from roughly $77,200 to below $76,000 in the hours around the roll call, and Coinbase shares shed about 8.65% while Circle Internet Group fell roughly 11%. Leveraged positions amplified the move: around $289 million in crypto positions were liquidated in the hour surrounding the vote, with about 91% of them bullish long bets, pushing the 24-hour liquidation total to $771.82 million across more than 120,000 traders, according to Coinglass.

ETH ETFs Draw Institutional Inflows as Fed Decision Day Arrives

A separate and striking divergence has been playing out in the ETF market. Spot Ethereum ETFs absorbed $216.41 million on September 11 alone, their strongest single-day inflow since late August, with BlackRock's ETHA accounting for $148.8 million of that total. Ethereum was the only major crypto fund category to record net inflows that day, as Bitcoin and Solana products both saw outflows. For 2026, Ethereum spot ETFs now sit at roughly $863 million in net positive flows while Bitcoin spot ETFs remain about $1 billion net negative on the year.

All eyes now turn to the Federal Reserve, which holds its September 15-16 FOMC meeting today. CME FedWatch puts the probability of a 25-basis-point rate hike at roughly 94.5%, which would mark the first Fed increase since July 2023. A hike would compound pressure on risk assets already rattled by the Clarity Act collapse, though Goldman Sachs analysts have noted that institutional ETF demand may cushion crypto from the worst of the macro headwinds. Bitcoin was trading near $75,961 as of Tuesday morning, down sharply from its August peak above $79,000.