Cryptocurrency markets decline amid US regulatory uncertainty

Cryptocurrency markets in Asia experienced a downturn on Tuesday as optimism regarding the US Clarity Act faded and concerns over higher interest rates from the Federal Reserve weighed on high-risk assets. Bitcoin fell below $78,000, dropping approximately 1.9% to $77,600, while Ether saw a decline of roughly 2.8% to 3.3%.

Market sentiment shifted after the probability of the Clarity Act passing this year dropped from over 30% on the Polymarket prediction platform to 18% during Asian trading. This decline follows Democratic opposition to the latest Republican proposal. Senator Mark Warner stated that Democratic negotiators intend to submit a counter-proposal ahead of a critical procedural vote.

The Clarity Act, a comprehensive bill for cryptocurrency regulation, has been stalled by partisan disputes for a year. To advance, the legislation requires support from several Democrats to meet the 60-vote threshold required in the Senate.