Key Takeaways
- The Senate moving its Clarity Act draft out of committee yesterday gave crypto stocks a short-lived boost.
- Shares of crypto-linked stocks including Strategy, Coinbase, and Robinhood slid, falling at least 4% as broad market indexes ticked lower and the price of bitcoin slipped below $80,000.
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A risk-off day is taking some of wind out of crypto’s sails.
Broad market indexes declined Friday, with stocks—including some high-profile, high-flying tech shares—retreating to end the week. That showed up in crypto, too: The price of bitcoin fell below $80,000 after spending much of May above that level, while leading crypto-linked stocks including Coinbase (COIN), Strategy (MSTR), Circle (CRCL) and Robinhood (HOOD) sank between 4% and 8%.
That same group was lifted just yesterday after the Senate’s draft of the Clarity Act, a key industry bill that some have said would spur crypto markets higher, passed out of committee. Some digital-assets experts preferred to bide their time after Thursday’s legislative news.
WHY THIS MATTERS TO YOU
The passage of the Clarity Act could spur a new wave of adoption and revive crypto markets, according to some experts; that theory could be tested soon as the bill gets closer to becoming law.
“While there are certainly reasons to take some profits here,” Sean Farrell, head of digital assets strategy at Fundstrat, wrote in a note yesterday evening, referring to “sell-the-news” dynamics as well as stocks looking “increasingly stretched,” he also said that he’s “not rushing to make major adjustments in either direction.”
Another step forward for the Clarity Act might give crypto and crypto-linked stocks another boost, but macroeconomic worries may be a hurdle. (Recently, stablecoin issuer Circle has been a particular beneficiary of movement in Washington.)
Traders appear to be pricing in a greater possibility of a rate hike this year, according to CME Group’s FedWatch. Odds of a quarter-percentage-point hike at the Fed’s October meeting rose were near 29% on Friday, up from under 7% last week, the data show.
Read Investopedia’s full coverage of today’s trading here.
