Progress around key crypto legislations in the US remains stuck in limbo, effectively capping price action as institutional capital remains on the sidelines.
After a year of blistering gains that saw Bitcoin soar from under $70,000 to an all-time high of $126,000 in October, the flagship crypto has crashed to multi-month lows.
Bitcoin’s rally last year was primarily fueled by President Trump’s return to office and a renewed political mandate to make the United States “the crypto capital of the world.”
Subsequently, a string of pro-industry appointments and legislative efforts, including the GENIUS Act for stablecoins, initially buoyed sentiment.
But market euphoria has collided with the entrenched complexities of US policymaking.
Bitcoin price is now trading below its re-election baseline, and briefly dipped to a 16-month low near $60,000 this week before stabilising in the $65,000–$68,000 range.
Key legislations stall in the US
The GENIUS Act, signed into law in mid-2025, established baseline standards for fiat-backed stablecoins and was hailed as the sector’s first meaningful regulatory win.
But with enforcement rules still pending finalisation from the Treasury and banking regulators, expected no sooner than July 2026, their market impact remains partial.
Meanwhile, broader efforts to define the contours of US crypto oversight have stalled outright.
The CLARITY Act, designed to resolve the long-standing jurisdictional battle between the SEC and CFTC, cleared the House in 2025 but hit a wall in the Senate Banking Committee at the start of 2026.
The bill’s demise followed criticism from major industry players, including Coinbase, which withdrew support over controversial amendments targeting stablecoin yield programs.
Banks, led by voices like Bank of America CEO Brian Moynihan, warned that such products could drain trillions from traditional deposits and destabilise smaller lenders.
Crypto firms, in turn, accused lawmakers of caving to TradFi pressure.
Senators Tim Scott and Elizabeth Warren, though ideologically distant, have found common ground in opposing the current draft, albeit for vastly different reasons.
A recent closed-door White House summit on Feb. 10, between banking titans and crypto executives, despite being described as “productive,” ultimately failed to resolve the issue of stablecoin yield, leaving the CLARITY Act’s markup indefinitely postponed.
The situation has left policymakers paralysed, with bipartisan factions now sceptical of any bill that has simultaneously alienated both Wall Street and Web3.
Crypto market impact
With no functional framework to regulate or expand crypto infrastructure in the US, capital has begun to migrate elsewhere.
According to data from SoSovalue, roughly $3 billion in net outflows from US-based crypto funds have occurred since the start of 2026.
Meanwhile, more than $800 billion in market cap has evaporated from the digital asset sector since January 1, according to industry trackers.
Institutional investors, particularly pension funds and endowments, are now sitting on the sidelines, unwilling to engage with a market that remains in a regulatory grey zone.
Analysts have described the current environment as directionless, a result of the disappearance of the regulatory premium that once pushed prices higher on anticipation of a mature US market.
Until lawmakers resolve key points of contention, Bitcoin is expected to remain range-bound.
For now, Bitcoin and the broader crypto market are trading more on global macro signals and liquidity flows.
