U.S. Crypto Legislation Hits Snag as Market Structure Bill Gets New Deadline

The U.S. digital asset industry faced a mixed bag of regulatory news from Washington this week, creating crosscurrents of uncertainty that are being reflected in the cryptocurrency markets. A significant legislative effort, the budget reconciliation bill, passed the Senate on a narrow 50-50 vote with the Vice President breaking the tie. However, it advanced without a key pro-crypto tax provision championed by Senator Cynthia Lummis. The proposed amendment aimed to rationalize the U.S. tax code for digital assets, including a crucial waiver on capital gains taxes for small-scale transactions. Despite last-minute lobbying from the industry, the amendment was not included, marking a setback for efforts to simplify crypto taxation and eliminate what proponents call unfair double taxation. The broader bill, which contains major spending overhauls, now moves to the House of Representatives, where it is expected to face significant debate, leaving the fate of many policies, and the overall fiscal outlook, in a state of flux.

September 30 Emerges as Key Date for Crypto Market Bill

While the tax provision failed, a new, concrete timeline has been set for a more comprehensive crypto market structure bill. At a press event on Thursday, Senate Banking Committee Chairman Tim Scott informed White House crypto adviser Bo Hines that he expects the foundational legislation to be completed by September 30. This new deadline is later than the White House's initial hope for a resolution before the August congressional recess but provides a firm target for the industry to watch. Senator Lummis, who leads the digital assets subcommittee, affirmed her commitment to meeting the chairman's timeline. However, the path forward is complex. The House of Representatives, which had been leading with its own Digital Asset Market Clarity Act, has not yet committed to fast-tracking the Senate's recently passed stablecoin bill, the GENIUS Act. Representative French Hill indicated that differences between the House and Senate versions of the stablecoin legislation need to be reconciled, suggesting a process that could extend beyond the aggressive deadlines envisioned by the Senate and the White House.

Ethereum (ETH) Price Reacts to Regulatory Uncertainty

This evolving legislative landscape is creating tangible effects in the crypto markets, particularly for major assets like Ethereum (ETH). Over the past 24 hours, ETH has experienced notable downward pressure. The ETH/USDT pair, a key barometer of market sentiment, dropped by nearly 4%, falling from a 24-hour high of $2,521 to a low of $2,404. This price action establishes a clear short-term resistance level at the $2,500 mark and critical support around the $2,400 psychological threshold. A sustained break below this support could open the door for further declines. The trading volume in ETH/USDT was a significant 334 ETH, indicating active selling pressure. The story is similar across other pairs, with ETH/USD falling 3.7% to $2,417, reinforcing the bearish sentiment. Traders are closely watching the $2,400 level as a pivotal point for Ethereum's next move.

Further analysis of trading pairs reveals a more nuanced market picture. The ETH/BTC pair declined by 1.33% to 0.02303, signaling that Ethereum is currently underperforming Bitcoin. This is often a classic sign of a risk-off environment within the crypto space, where capital flows from altcoins back into the relative safety of Bitcoin. However, not all altcoins are suffering equally. The SOLETH pair, measuring Solana's performance against Ethereum, rose by an impressive 2.6%, suggesting some traders are rotating capital into Solana as a relative strength play. Similarly, the ADAETH pair saw a 1.84% increase, indicating that Cardano is also holding up better against Ethereum amidst the downturn. These divergences present opportunities for pair traders who can capitalize on the relative performance between different digital assets. The overarching narrative remains one of caution, as the market digests the mixed signals from Washington and awaits the legislative outcomes promised for the end of September.