Bitcoin and XRP plummeted Wednesday after lawmakers abruptly postponed the Digital Asset Market CLARITY Act markup. The Senate Banking Committee‘s decision sent shockwaves through crypto markets, with no new date announced for what could be a months-long delay.
Coinbase didn’t help matters. CEO Brian Armstrong publicly yanked support via X, objecting to provisions that would weaken CFTC authority and restrict stablecoin rewards. Talk about bad timing. His withdrawal came right before the markup hearing, fundamentally torpedoing the bill’s momentum.
Armstrong’s ill-timed retreat crushed the bill’s momentum right when crypto needed unity most.
The market reaction was swift and brutal. Bitcoin nosedived as traders scrambled to assess the implications. XRP holders got hit just as hard, with synchronized selling pressure driving both assets lower. Trading volume exploded—never a good sign when prices are tanking.
The delay wasn’t exactly a surprise to insiders. Banking lobbyists have been fighting tooth and nail against stablecoin yields, terrified that consumers might actually earn decent returns outside traditional banks. Heaven forbid.
Committee priorities shifted fast. Housing affordability suddenly became urgent—conveniently aligning with President Trump’s agenda right before midterms. Crypto legislation? Back burner.
This isn’t the CLARITY Act’s funeral yet. Senate Banking Chairman Tim Scott remains “optimistic” about eventual passage. The legislation aims to properly classify digital tokens by their function and establish clear regulatory standards. Industry lobbyist Ron Hammond puts the odds at 40%, which is political speak for “don’t hold your breath.” The delay could extend into late February or March as legislative focus continues to shift toward election priorities.
The competing Senate Agriculture Committee draft, scheduled for markup on January 27, could still move forward. But with a sharply divided Senate and election pressures mounting, voter-facing issues will trump crypto every time.
Markets hate uncertainty. The bill’s indefinite postponement signals more regulatory limbo ahead. For investors without clear investment goals, this volatility can lead to emotional decision-making and potential losses. Bitcoin and XRP traders should buckle up—this volatility isn’t going anywhere.
For crypto advocates hoping 2026 would bring regulatory clarity, this setback stings. The industry’s moment in the legislative spotlight just got dimmer. Back to the waiting game.
