On the Chain: Bitcoin slips below US$78,000 as crypto braces for crucial US Senate vote

Bitcoin has slipped back below US$78,000 after briefly breaking through US$79,000 overnight, with cryptocurrency markets turning cautious ahead of a potentially decisive vote on sweeping US digital asset legislation.

The world's largest cryptocurrency traded at about US$77,960 early Tuesday after reaching an overnight high near US$79,580. Bitcoin had gained more than 2% on Monday before surrendering some of those advances.

Attention has shifted firmly to Washington, where the US Senate is scheduled to hold a procedural vote on the Digital Asset Market Clarity Act at 2.15pm Eastern Time on Tuesday.

The vote is not final passage of the legislation. Senators will decide whether to invoke cloture on a motion to proceed with the bill, requiring 60 votes to advance it towards debate.

Crypto regulation faces major test

The Clarity Act would establish a broad federal regulatory framework for digital assets and clarify the respective responsibilities of the Securities and Exchange Commission and Commodity Futures Trading Commission.

Republican senators released a revised version of the legislation ahead of the vote containing 126 substantive changes requested by Democrats, including stronger ethics and consumer-protection provisions.