XRP Drops 9% to $1.28 as the CLARITY Act Fails: What’s Next for the Coin That Needed It Most?

XRP dropped 9% on the CLARITY Act's Senate failure, but Coinbase fell 9%, more exposed to the rulebook the bill would have set.

XRP retains its SEC-CFTC commodity classification and 5 live spot ETFs with $1.7 billion in net inflows, keeping its legal floor intact.

XRP has underperformed Bitcoin on every rate release this month, with $1.25 as the critical support heading into the Fed's afternoon decision.

On Monday, XRP (CRYPTO:XRP) surged 9.8% to $1.49, while Ripple CEO Brad Garlinghouse told the Senate that "the world was watching." However, two days later, the Senate failed to open debate on the CLARITY Act, and XRP fell to $1.28.

The coin dropped 9.4% over 24 hours and 10.7% over the week, while Bitcoin (CRYPTO:BTC) lost only 1.2%. This raises the question: was Tuesday's drop the full political adjustment for XRP, or just the first phase?

XRP Fell 7.8 Times Harder Than Bitcoin Because It Had More at Stake

Regulators ceased questioning Bitcoin's commodity status years ago. By contrast, XRP went through a five-year court battle over the same issue, which was ultimately settled without a statute backing it. The CLARITY Act would have turned that legal clarity into a statute, making Tuesday's vote more critical for XRP than for any other major cryptocurrency.

The Senate rejected cloture 49 to 50, eleven votes short of the 60 required. Cloture allows a bill to proceed to the floor for debate. Therefore, passing it would have only initiated discussion.

After the vote, selling was orderly. Funding on XRP perpetual futures had already turned negative before the vote, indicating shorts had anticipated a failure. Coinbase ended down 8.65%, and Circle about 11%, both more affected than XRP, as the bill's passage was crucial to the exchanges' market structure.

Polymarket Odds Dropped from 90% in February to 5% After the Vote

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Traders have put $20.56 million into Polymarket's market concerning whether the CLARITY Act will be signed into law by 2026. This market initially had a 90% chance in February. By September 6, it dropped to 18%, climbed back to around 30% by September 14, and then plummeted by 12 points overnight to 18.5% on Tuesday morning as negotiations broke down.