Bitcoin Takes a Hit as US Crypto Legislation Stalls in Congress

The cryptocurrency market experienced a notable pullback on Tuesday, with Bitcoin's price sliding below the $117,000 mark. This decline followed a significant legislative roadblock in the U.S. House of Representatives, where a series of highly anticipated cryptocurrency-related bills failed to advance.

According to Coin Metrics, the price of Bitcoin was last seen down 2.8% at $116,516.00, retreating from an earlier daily high of $120,481.86. The drop signals a pause in Bitcoin's recent momentum, which had seen it trading at all-time highs in recent days. This surge was largely fueled by growing institutional investment in Bitcoin exchange-traded funds (ETFs) and a prevailing optimism that comprehensive crypto legislation was imminent in Congress.

The legislative setback occurred when multiple bills aimed at providing regulatory clarity for the digital asset sector were unable to overcome a crucial procedural hurdle. In a 196-223 vote, 13 Republican lawmakers joined Democrats to block the motion, effectively halting the progress of these bills. Among the blocked legislation was a Senate-passed stablecoin bill, the "GENIUS Act," which aimed to create a federal framework for stablecoins, and other proposals addressing market structure and preventing a central bank digital currency (CBDC). Some hardline Republicans reportedly voted against the procedural vote, demanding a stronger stance against CBDCs and wanting all crypto bills to be packaged together. Additionally, concerns regarding President Donald Trump's connections to the crypto industry also reportedly played a role in some Democrats' decision to block the motion.

The ripple effect of this legislative disappointment was also felt across the broader crypto-linked stock market in late afternoon trading. Shares of prominent Bitcoin miners, Riot Platforms and Marathon Digital Holdings (formerly Mara Holdings), closed down 3.3% and 2.3% respectively. Crypto trading platform Coinbase also saw its shares slide by 1.5%, with all three companies experiencing further pressure in extended trading.

While the long-term outlook for crypto legislation in the U.S. remains uncertain, Tuesday's events underscore the market's sensitivity to regulatory developments. Investors will be closely watching for any renewed efforts to establish a clearer legal framework for digital assets, which is widely seen as crucial for broader adoption and sustained growth in the cryptocurrency space.