Coinbase Global Inc. (NASDAQ:COIN) fell around 6% Tuesday, roughly twice the decline in Bitcoin (CRYPTO: BTC), as prediction market traders slashed the chances of landmark U.S. crypto legislation becoming law this year.
Polymarket odds for the CLARITY Act are trading around 15%, down from over 30% yesterday, after Sen. Cynthia Lummis (R-Wyo.) rejected a Democratic counterproposal hours before a crucial Senate vote.
The bill is particularly important for Coinbase because it would clarify federal oversight of digital assets and set rules for stablecoins, an increasingly important part of the company’s business.
The Polymarket contract has attracted more than $18 million in trading and measures whether H.R. 3633 is signed into law by Dec. 31, not whether it merely survives Tuesday’s vote.
CLARITY Optimism Unravels
The reversal comes a day after Republicans released a revised draft incorporating 126 substantive changes requested by Democrats.
President Donald Trump also reportedly agreed to about 80% of a bipartisan ethics proposal aimed at preventing elected officials from profiting from crypto interests.
But Sen. Mark Warner (d-VA) and other Democrats said the protections still did not go far enough, according to Reuters.
Democrats sent a counterproposal Monday night.
Lummis, a lead Republican negotiator who had described the GOP draft as its final offer, rejected the Democratic response Tuesday.
When former Democratic Rep. Tim Ryan told Benzinga Monday that supporters could find the votes to advance the bill, Polymarket put its year-end passage odds at 29%.
“I think we can get there,” Ryan said.
Senate Vote Needs 60
Senators are scheduled to vote at about 2:15 p.m. ET on whether to invoke cloture on the motion to proceed to H.R. 3633.
The vote needs 60 senators and does not pass CLARITY. It allows the Senate to begin formally considering the bill.
Republicans hold 53 seats, but concerns over stablecoin provisions mean supporters may need more than seven Democratic votes to reach 60.
Failure Tuesday would leave little room for another attempt before the midterms. The Senate is scheduled to leave Washington after Oct. 2 for a state work period lasting through Nov. 6.
Why CLARITY Matters to Coinbase
The bill would clarify whether digital assets fall under SEC or CFTC oversight and address stablecoin rules, both major issues for Coinbase.
Average USDC held in Coinbase products reached $20 billion last quarter, more than 30% of USDC in circulation. Coinbase also said it captured roughly 50% of USDC economics over the past year, giving the company a direct financial stake in how Congress writes stablecoin rules.
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