Key Takeaways:
Bitcoin fell to $65,500 and the odds of the Clarity Act passing collapsed to 38% as rising oil prices, higher Treasury yields, and Democratic opposition to the bill's ethics provisions created a triple headwind for digital assets.
Bitcoin fell 0.7% to about $65,500 as oil surged to $88.60 a barrel and the odds of the Clarity Act passing tumbled to 38% after key Senate Democrats said the latest draft "falls short" on ethics safeguards.
"The ethics language agreed to by the White House is the most powerful in U.S. history," Senator Bernie Moreno said in a statement, though a group of Senate Democrats countered that the provision's sunset clause and limited scope fail to address conflicts of interest tied to President Donald Trump's crypto ventures.
The 616-page draft bars the president, senior officials and their spouses from issuing or sponsoring digital assets while in office, but the restriction expires at noon on Jan. 20, 2029, and does not extend to the president's children. Trump earned more than $1.2 billion from crypto businesses last year, according to financial disclosures. The bill also preserves the Blockchain Regulatory Certainty Act, creating a safe harbor for non-custodial developers, and maintains a ban on stablecoin yield.
The bill needs 60 votes to clear the Senate, requiring at least 10 Democrats, many of whom have already balked. With the August recess approaching, the first week of August is widely seen as the last realistic window for floor action before attention shifts to the November midterms.
Oil and Rates Add Pressure
The weakness in bitcoin extended a pullback from a high near $66,700 reached Wednesday, with ether (ETH), solana (SOL) and XRP (XRP) also trading lower. Futures tied to West Texas Intermediate on the NYMEX climbed to $88.60 per barrel, the highest level since June 11, extending a rebound from recent lows below $70. The move signals a potential new inflationary impulse that could push up consumer price indexes, complicating central bank efforts to cut interest rates.
The U.S. two-year Treasury yield jumped to 4.31%, its highest level since February 2025, while the benchmark 10-year yield rose to 4.66%, the highest since May, according to TradingView data. Higher yields raise the opportunity cost of holding non-yielding assets such as bitcoin, often prompting investors to rotate into fixed-income securities.
Ethics Debate Threatens Senate Math
The ethics language has been widely viewed as the final hurdle to passing the sweeping market-structure bill, which would formally legalize most cryptocurrency activity in the United States. Digital Chamber CEO Cody Carbone called the draft "a meaningful step toward the Senate vote," while noting the group would provide feedback on how the bill "may still be improved."
Senator Elizabeth Warren has demanded the bill bar the president, vice president, senior officials, members of Congress and their families from profiting off the sector. The temporary nature of the ban and the decision to leave enforcement solely with the Justice Department is likely to draw further Democratic objections. Majority Leader John Thune intends to move to floor action in the coming days.
This article is for informational purposes only and does not constitute investment advice.
