TLDR
- Crypto stocks crashed on January 15-16 with Circle losing 9.67%, Robinhood falling 7.78%, and Coinbase dropping 6.49%
- Coinbase CEO Brian Armstrong called the CLARITY Act “materially worse than the current status quo” and withdrew support
- Senate Banking Committee canceled a scheduled vote on the crypto legislation following Armstrong’s announcement
- The sell-off erased more than $20 billion in value across crypto-related companies
- Kraken, Ripple, Circle, and Andreessen Horowitz still support the bill despite Coinbase’s opposition
Cryptocurrency stocks tumbled sharply after Coinbase withdrew its backing for pending federal legislation. The move triggered billions in losses across digital asset companies.
Circle shares dropped 9.67% to $76.60. Robinhood fell 7.78% to $110.36. Coinbase declined 6.49% to $239.26. Strategy lost 4.68%, ending at $170.93.
The decline started January 14 when Coinbase CEO Brian Armstrong issued a statement. He said his company could not support the CLARITY Act in its current form. Armstrong warned the bill would create worse conditions than existing regulations.
He stated that no legislation would be preferable to passing a problematic bill. Following his comments, the Senate Banking Committee postponed a markup session scheduled for January 15.
Widespread Sell-Off Hits Digital Asset Sector
The market reaction spread beyond major exchanges. Exodus plunged 11.09%. Bitmine dropped 5.48%. CleanSpark fell 4.42%. Riot Platforms lost 4.33%.
MARA, Bitfarms, Bullish, and Canaan posted losses between 3% and 6%. PayPal, Block, SharpLink, Metaplanet, Hut 8, Neptune, and GREE all closed lower. Combined losses topped $20 billion.
Smaller firms also suffered. American Bitcoin Corp fell 4.26%. Meliuz declined 6.03%. Gemini, Bit Digital, and Semler Scientific traded down.
Some stocks resisted the trend. Galaxy Digital jumped 13.46% with over $849 million in volume. Bitdeer rose 3.39%. Nexon and Net Holding posted gains. Strategy recovered 3.5% on January 16 alongside Bitcoin’s rebound.
What’s In The CLARITY Act
The CLARITY Act represents bipartisan legislation approved by the House in July 2025. The bill creates regulatory standards for digital assets. Separate legislation called the GENIUS Act covers stablecoins.
Armstrong’s concerns target the Senate draft released in early January 2026. He criticized provisions that diminish the Commodity Futures Trading Commission’s role. Earlier versions positioned the CFTC as the lead regulator.
The CEO pointed to problems with rules affecting decentralized finance privacy, stablecoin rewards, and tokenized securities. He described these elements as regressive compared to current standards.
Robinhood CEO Vlad Tenev expressed different views. He advocated for American leadership in crypto policy. Tenev supports legislation balancing consumer protection with innovation. He acknowledged improvements are needed but endorsed moving forward.
Split Industry Response
Major companies remain divided on the legislation. Kraken, Ripple, Circle, and Andreessen Horowitz continue supporting the bill. These firms argue it replaces vague enforcement with clear guidelines.
Supporters claim the framework enhances American competitiveness globally. They say it eliminates legal uncertainty that has restricted product launches.
Opponents highlight surveillance risks and weakened consumer protections. Democrats and privacy advocates worry about transferring authority from the Securities and Exchange Commission to the CFTC. They claim this reduces regulatory oversight.
Contentious provisions include stablecoin reward structures, privacy protections in decentralized finance, and tokenized equity rules. These topics remain under negotiation as Senate discussions progress.
Circle processed $1.2 billion in trading volume during the downturn. Coinbase handled $83.4 million. Traditional indexes performed well with the Dow climbing 292 points to 49,442. The S&P 500 reached 6,944 and the Nasdaq closed at 23,530.
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