$300 Million in Lobbying – and Crypto Still Loses

Bitcoin was supposed to have moved beyond regulatory uncertainty in Washington by now. That was one of the promises of the Clarity Act: clear responsibilities, fixed rules and better conditions for a market worth around $2 trillion. On Tuesday, it became clear just how much of that hope had already been priced in. A procedural vote in the US Senate failed by 49 votes to 50. Bitcoin lost around four percent, while shares in Coinbase and Circle fell by roughly nine percent at times. The Senate has not rejected the bill outright. But for now, the market did not get what the crypto industry has been working toward for months: regulatory clarity.

The bill is not dead – but it is blocked for now

It is worth taking a closer look at what actually happened in the Senate.

The vote was not on the final passage of the Digital Asset Market Clarity Act. Instead, senators voted on cloture on the motion to proceed to consideration of the bill. Sixty votes would have been required.

The result: 49 in favor, 50 against.

The necessary procedural majority was therefore missed. The Clarity Act has not been definitively rejected, but in its current form it will not move to further consideration on the Senate floor for the time being. The official Senate record accordingly lists the vote on H.R. 3633 as a failed cloture vote.

That is more than a parliamentary technicality. The bill has already come a long way. The House of Representatives passed the Clarity Act in July 2025. In May this year, after months of negotiations, the Senate Banking Committee also voted 15 to nine to advance it to the full Senate.

What only a few months ago looked like a possible bipartisan agreement has now stalled shortly before the midterm elections.

What is »Clarity« actually about?

The name captures fairly well what the industry hopes to gain from the legislation.

For years, the US crypto market has struggled with the question of which digital assets qualify as securities, when the Securities and Exchange Commission is responsible and where the Commodity Futures Trading Commission has jurisdiction.

The Clarity Act is intended to create a broader market-structure framework. Among other things, it would define different categories of digital assets, establish registration rules for trading platforms, brokers and dealers, and divide regulatory responsibilities between the SEC and the CFTC. In particular, the CFTC would receive a clearer regime for digital commodities.

Supporters argue that companies would be better able to determine which rules apply to their businesses. Republican backers in the Senate also cite consumer protection, anti-money-laundering enforcement and the competitiveness of US financial markets as key objectives of the bill.

That is why the Clarity Act was never just another piece of legislation for the markets. It represented a possible step toward moving crypto further out of its regulatory grey zone and into the institutional financial system.

Bitcoin stabilizes – crypto companies remain under pressure

After the failed Senate vote, Bitcoin fell by around four percent on Tuesday to roughly $75,000. By Thursday morning, the market had stabilized somewhat, with Bitcoin trading again at around $76,500. Even so, the cryptocurrency remains below the levels seen before the political setback.

The losses among listed crypto companies have proved more persistent. Coinbase had already fallen around ten percent on Tuesday and lost another 4.4 percent on Wednesday. Circle, after its sharp decline on Tuesday, shed a further 6.8 percent the following day.

That second wave of selling is particularly revealing. Bitcoin itself does not need US lawmakers in order to continue functioning technically. For Coinbase and Circle, however, the regulatory framework directly affects which products they can offer and how large their addressable market can become.

But the Clarity Act did not stumble in a calm market environment

The pressure on Bitcoin and crypto stocks cannot be attributed solely to Washington.

Just one day after the Senate vote, the Federal Reserve raised interest rates for the first time since 2023. The Fed lifted its target range to 3.75 to four percent in response to renewed inflationary pressure. Stocks subsequently came under pressure, while US Treasury yields rose.

Higher interest rates also matter for Bitcoin. When safe or relatively safe assets offer higher returns and liquidity becomes more expensive, risk assets can come under pressure.

Within barely 24 hours, the crypto market was therefore hit by two separate sources of uncertainty: less regulatory visibility and tighter monetary policy.

That the Clarity Act itself was an important factor is nevertheless evident from the immediate market reaction around the Senate vote. Several crypto-related assets fell sharply as soon as the outcome became known.

More than $300 million spent on political influence

The story becomes even more significant when looking at how important Washington has become to the industry.

According to Reuters calculations, crypto companies and affiliated groups have spent more than $300 million across the 2024 and 2026 election cycles – including money used to support crypto-friendly candidates and fund nationwide political campaigns.

The scale of that spending shows how much the industry has changed.

Bitcoin was originally created around the idea of a financial system that could operate without central institutions. Today, the crypto industry spends hundreds of millions of dollars trying to influence the rules made by those very institutions.

That is not unusual in itself. Banks, pharmaceutical companies, energy groups and technology companies all engage in intensive lobbying. What stands out in crypto is how quickly this shift has occurred.

Despite all that spending, the votes were still not there on Tuesday. According to Reuters, four Republican senators also voted against moving forward.

Political engagement can buy access and attention. It cannot guarantee a parliamentary majority.

Trump turns regulation into an ethics issue

One of the most important disputes now lies outside traditional financial-market regulation.

Several Democrats made their support conditional on stricter rules governing crypto activities by public officials. The backdrop is President Donald Trump’s extensive involvement in crypto ventures, together with that of his family.

Democratic members of the Senate Banking Committee estimate Trump’s income from crypto activities at more than $1.4 billion based on his financial disclosures. That figure, and the conclusions drawn from it, come from Democratic committee members and form part of their political criticism of the legislation.

Senator Adam Schiff said immediately before the vote that any crypto bill would need not only regulatory clarity but also enforceable ethics rules and adequate safeguards against conflicts of interest involving public officials.

Republican negotiators reject the suggestion that such concerns were ignored.

Just one day before the Senate vote, Cynthia Lummis, John Boozman and Tim Scott released a revised version of the legislation. According to them, it incorporated 126 changes resulting from negotiations with Democrats. Among other things, the draft expanded ethics provisions and gave state attorneys general additional enforcement powers.

The dispute, then, was not over whether ethics rules should exist.

It was over how far they should go and how effectively they could be enforced.

And then there are the banks

The second major conflict cuts straight across the financial industry.

At the center are stablecoins – digital tokens whose value is typically pegged to the US dollar. They become particularly relevant to banks when platforms offer interest, yields or economically similar rewards on stablecoin holdings.

Banking associations warn that customers could move money out of traditional bank accounts and into stablecoins. Fewer deposits, they argue, could in turn leave smaller banks with less funding available for loans to companies, homebuyers or farmers.

That is the position taken by the American Bankers Association and other industry groups.

The latest version of the Clarity Act therefore included a compromise: the US Treasury would be able to intervene if such stablecoin products caused significant deposit outflows from smaller banks. Republican authors of the bill presented this as a safeguard.

Banking groups considered it insufficient. They called for a clearer ban on stablecoin rewards that resemble interest payments before large-scale deposit outflows could occur in the first place.

A seemingly technical debate over crypto regulation thus turns into a battle over the distribution of money within the traditional financial system.

• Who should be allowed to offer deposit-like products?
• Under what rules?
• And who will ultimately hold customers’ money?

Regulation has become part of crypto valuations

That is why markets are reacting so sensitively.

The Clarity Act would not have made Bitcoin faster. It would not have created any additional coins. Nor would it have changed the technological quality of a blockchain.

What it would have changed are the institutional rules under which banks, exchanges, funds, stablecoin providers and other financial companies are allowed to use digital assets.

For investors, regulation has therefore become a fundamental valuation factor in its own right.

That also helps explain why Coinbase or Circle can be hit harder by a failed legislative vote than Bitcoin itself. For those companies, the issue is not merely the price of a digital asset.

It is the rules governing their business.

The market priced in clarity – and is now facing uncertainty

Crypto regulation in the United States is not coming to a complete halt.

The SEC and CFTC can still issue rules and enforce existing law even without the Clarity Act. Analysts also point out that the development of digital financial products will not stop simply because of one failed Senate vote.

The bill itself could also be revived or amended.

But timing matters. The midterm elections in November are approaching, and the balance of power in Congress could change afterwards.

For markets, that means one thing above all: some of the regulatory certainty investors had expected now has to be repriced.

And the vote reveals something that goes far beyond Bitcoin.

Cryptocurrencies were originally conceived as an alternative to the established financial system. Today, a significant part of their economic success depends on how they are integrated into that very system.

SK