Crypto Bloodbath: How Congress’ New Market Bill Sent Digital Assets Spiraling
Another day, another congressional curveball—this time with crypto catching the knife. Here’s the breakdown on why markets are panicking.
The Bill That Broke the Camel’s Back
Fresh legislation targeting stablecoin oversight and DeFi compliance dropped like a lead balloon on crypto markets. No specific numbers? Classic Washington—just vibes and volatility.
Liquidity Vampires Strike Again
Market makers pulled bids faster than a hedge fund manager at a soup kitchen. The usual suspects—BTC, ETH, SOL—all took double-digit percentage hits as algorithmic traders went berserk.
Silver Lining Playbook
Veteran traders are whispering about capitulation signals while VC funds sharpen their acquisition pencils. Because nothing solves regulatory uncertainty like buying distressed assets at fire-sale prices.
The Bottom Line
Until DC decides whether crypto is a security, commodity, or piñata, expect more chaos. Just remember: Wall Street’s ’risk management’ algorithms will be fine—your portfolio? Maybe less so.
Why is Crypto Crashing? A Bold Move to Redefine Crypto Oversight
Congress? The same Congress that had done absolutely nothing for decades. Whose approval rating is at record low. That Congress? Well, um, yes!
The CLARITY Act cuts through years of bureaucratic fog with one blunt proposal: treat most digital assets as commodities, not securities. That means shrinking the SEC’s reach and putting the Commodity Futures Trading Commission in the driver’s seat.
Rep. Bryan Steil, who chairs the House Financial Services Subcommittee, says it’s a MOVE aimed at keeping the U.S. ahead in the global crypto race.
Steil stated.
ICYMI: The CLARITY Act has been introduced to finally establish clear rules for crypto@RepFrenchHill of Arkansas is leading the charge on what could be the most important crypto legislation we’ve ever seen in this country. He’s joined by a bipartisan group of co-sponsors… pic.twitter.com/07yXUAZW1J
— Max Avery (@realMaxAvery) May 29, 2025
That redefinition WOULD give clear cover to major digital assets like BTC, ETH, SOL, and DOGE, which have long operated in legal gray zones.
The bill’s political support cuts across party lines, with Democrats Angie Craig, Ritchie Torres, and Don Davis signing on. In a divided Congress, that kind of coalition doesn’t FORM unless the stakes are real.
“This is about keeping the U.S. in the game,” said Rep. Dusty Johnson. “Without clarity, we fall behind.”
Provisions That Change the Game
The bill defines most crypto assets as “digital commodities,” including governance tokens like WLFI, issued by World Liberty Financial. It also sketches out a new category—“mature blockchain systems”—for networks that are open-source, decentralized, and cap individual ownership.
Exchanges will have a choice to register with the CFTC if they trade digital commodities, or stay under SEC scrutiny if dealing in securities. The CFTC would also get sole jurisdiction over spot markets under the bill.
Why is Crypto Crashing? What This Means for the Crypto Industry
By shifting authority from the SEC to the more hands-off CFTC, the CLARITY Act could lower the barrier for entry in crypto—less red tape, more room to build.
Projects like ethereum and Solana may gain traction as developers and investors finally get regulatory breathing room. DeFi platforms and wallets would also be exempt from SEC interference, a clear win for the open-source crowd.
But don’t bet on a smooth ride. This is Congress we’re talking about and Trump’s pushing for an ambitious August deadline for crypto regulation.
Key Takeaways
- Why is crypto crashing? One reason is that the regulatory turf war over crypto might finally be nearing a conclusion, and it’s not all good news.
- By shifting authority from the SEC to the more hands-off CFTC, the CLARITY Act could lower the barrier for entry in crypto.
