Huobi HTX chief analyst Cloud said Bitcoin fell from around $77,800 to $74,910 after the CLARITY bill was blocked in a procedural vote in the Senate.
Cloud described the sell-off as event-driven and said similar shocks have historically been absorbed within five to 10 trading days. He argued that the real cost of the bill’s failure lies in timing: Congress is in recess this month, the U.S. midterm elections are in November, and the practical legislative window has effectively been pushed to 2027. That, he said, delays institutional growth businesses including bank custody, broker distribution, and tokenized securities by a year. In his framing, the lasting pressure is on valuations, while the hit to price is a one-off reaction.
How Cloud split the decline between policy and macro
For the single-day drop, Cloud said the bill accounted for roughly 60% to 70% of the move, while macro factors explained 30% to 40%. Looking at the broader correction, he said the mix flips, with macro at 70% and the bill at 30%.
He cited the 10-year U.S. Treasury yield climbing above 5.005%, oil rising to $105, and renewed expectations of rate hikes as the main forces shaping prices this week. The bill, in his words, only gave an extra push to selling pressure that had already built up. As he put it, 「The bill is the fuse; rates are the explosive.」
Crypto stocks fell harder than Bitcoin
Cloud also pointed to Coinbase falling 10% and Circle dropping 11%, both notably steeper than Bitcoin’s decline. He said that suggests the market does not believe the failed bill undermines Bitcoin’s store-of-value property, with ETF flows and institutional allocations still providing support.
The area under pressure instead is the legislative premium attached to compliance-driven business models. According to Cloud, a large share of the excess gains in crypto stocks over the past few months had been tied to expectations that passage of the bill would lift trading volumes, institutional custody activity, and stablecoin adoption. That premium, he said, has now been cleared out.
He added that crypto equities are, in essence, long-duration and highly leveraged derivatives of Bitcoin. A 3% move in Bitcoin can be amplified through trading volume, fee rates, and reserve income, eventually showing up as a 10% drop in share prices.
Attention turns to administrative action
Cloud said the U.S. Securities and Exchange Commission had in August proposed an exemption for unregistered offerings of up to $75 million, while the Commodity Futures Trading Commission had approved the first batch of Bitcoin perpetual contracts to go live. He also noted that Coinbase has publicly said it expects the two regulators to fill the gap using their existing authority.
Cloud said that if administrative measures are rolled out in a concentrated way, the crypto stocks hit by this sell-off could show a bigger rebound than Bitcoin.
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