Bitcoin (BTC -4.02%) is down more than 4% since 4:30 p.m. ET yesterday, on Tuesday, Sept. 15, as investors worried about both crypto regulation and tighter financial conditions.
The Senate vote could decide whether crypto legislation advances
The CLARITY Act, which would create a regulatory framework for digital assets, faces a procedural Senate vote today. The bill needs 60 votes to advance, but reports indicated it may lack the necessary support amid concerns from Senate Democrats.
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Oil above $109 and a 5% Treasury yield added to selling pressure
Still, I wouldn't pin the entire decline on Washington. Bitcoin is sensitive to changes in the bond market, and as oil prices continue to climb, the 10-year Treasury yield topped 5%, reaching its highest level in nearly 20 years. Investors appear fairly convinced that a rate hike is incoming from the Federal Reserve.
CRYPTO: BTC
Key Data Points
Typically, when bond yields rise, volatile assets become a tougher sell, as investors opt for a healthy, safe return.
The bottom line
I wouldn't get too caught up in any single short-term moves, but the next week will be a telling one for Bitcoin. To my mind, the Clarity Act is less interesting than what the Fed decides and how Bitcoin reacts.
