Bitcoin tumbles 4% to $75,000 as hopes of CLARITY Act passage this year fade

What happened: Bitcoin ( BTC-USD ) fell 4% to hover below $76,000 on Tuesday.

What's behind the move: The world's largest cryptocurrency lost ground ahead of a Fed decision this week , and as the CLARITY Act struggled to clear a cloture vote in the Senate.

Hopes of securing the 60 votes needed to proceed faded ahead of the afternoon vote as Republicans and Democrats remained divided over the latest version of the bill.

Polymarket bettors gave the bill a 5% chance of becoming law this year . Investors now fear it will be shelved until after the midterm elections and potentially pushed to 2029.

The crypto market has been closely following the bill aimed at establishing a comprehensive federal framework for digital asset markets.

"The future of finance is being built on the blockchain," Coinbase ( COIN ) chief policy officer Faryar Shirzad told Yahoo Finance on Monday. (Disclosure: Yahoo Finance has a partnership with Coinbase.)

"This law gives developers, innovators, traditional financial companies, all of us, the regulatory certainty we need to know how to build the next generation of finance and what rules apply," he said.

What else you need to know: Following a brutal sell-off late last year and into 2026, bitcoin has been showing signs of a bottoming.

"The recent BTC price movement suggests that the crypto winter is close to being over," Noelle Acheson, author of the Crypto Is Macro Now newsletter, told Yahoo Finance in a recent interview.

The token rallied 25% last month as the Treasury Department's recent intervention in the bond market and assistance to Japan helped lift the prices of gold and crypto assets.

Some of those gains were given back amid surging oil prices and rising expectations that the Federal Reserve will hike rates on Wednesday, with the market pricing in a 92% chance.

"Even if the Fed delivers the expected hike, there is room for the market reaction to be dovish if the dot plot or Chair Warsh's commentary falls short of those expectations,' said Sean Farrell, head of digital assets at Fundstrat.

"That could create another favorable asymmetry for BTC, ETH, and broader crypto," he added.

Ines Ferre is a senior business reporter for Yahoo Finance.