CLARITY Act setback shakes crypto – But $2.9B tokenized stock market thrives

Does the crypto market actually need the CLARITY Act?

Interestingly, that’s the type of conversation that erupted on social media after the Senate’s failed attempt to pass the act on the 15th of September. From a technical perspective, however, it’s too early to jump to any conclusions about the CLARITY Act’s irrelevance to the crypto market. Following the failed vote, the total crypto market cap plummeted by almost $100 billion, recording a huge 3.34% drop.

In fact, this was one of the largest single-day corrections in recent months. The result? A significant technical sweep.

Bitcoin [BTC] and other large-cap assets displayed similar performances, which saw BTC break below the $75k support. This triggered more than $500 million in long liquidations, marking the strongest cascade since the late-August cycle, when BTC was trading around the $80k level.

In this regard, believing that the passage of the CLARITY Act would not have any value to the crypto market seems too far-fetched. If anything, the immediate reaction suggests that regulatory clarity was already playing a key role in market positioning.

So, with the act now withdrawn, will that slow down crypto’s institutional adoption?

The CLARITY Act was supposed to give institutions the confidence to enter the markets. In this regard, the likelihood of institutional adoption slowing down is high. However, a key signal suggests that crypto might still have strength beyond the act.