Bitcoin dropped 2% on Tuesday, caught in a broader selloff that saw South Korea's Kospi index tumble 11%. The decline came as the U.S. Senate shelved the Clarity Act, a bill that had been closely watched by the crypto industry. The moves set the stage for a pivotal Federal Reserve decision later this week.
Kospi's 11% plunge
The Kospi's 11% tumble was steep, and it coincided with a 2% drop in Bitcoin. South Korea is a major hub for crypto trading, and the index's slide signals a broad risk-off sentiment that spilled into digital assets. Bitcoin wasn't alone — other major cryptocurrencies also saw red, though the moves were relatively modest compared to the equity rout.
Clarity Act shelved
The U.S. Senate shelved the Clarity Act on Tuesday, effectively killing — or at least postponing — a bill that aimed to provide a regulatory framework for digital assets. The legislation had been a focal point for industry lobbyists who argued that clear rules would encourage innovation and investment. Its removal from the Senate calendar leaves the regulatory landscape uncertain.
Fed decision ahead
The market is now bracing for a Federal Reserve decision that could set the tone for risk assets in the coming weeks. The Fed's move — whether a rate hike, hold, or cut — will be closely parsed. Crypto traders are particularly sensitive to liquidity conditions, and a hawkish outcome could add pressure. The announcement is expected later this week. Until then, traders are likely to stay cautious.
